Prices for Chinese billet in both local and export markets have been corrected up slightly early this week, supported by the increase in raw material prices. Nevertheless, market sources still doubt that this is a start of a firm uptrend, while it has rather been assessed as a correction since the gradual improvement in demand has been in line with rising supply and in general the market fundamentals have not changed much.
The SteelOrbis reference price for ex-China billet is up $5/mt compared to late last week to $430-450/mt FOB with the midpoint at $440/mt FOB. A number of market sources have confirmed that offers for the Asian markets are mainly at $440-445/mt FOB, while some traders have been offering up to $450/mt FOB for distant markets. “China’s futures have increased yesterday and today. I think the push is coming from raw materials again,” a Singapore-based trader said. Over the past two days, coking coal and coke futures in China were increasing by over four percent each day amid reemerging concerns over restrictions on miners in in Xinjiang Province. “Our domestic market is increasing a little, but for the international market I don’t see any improvement yet,” a Chinese trader said, adding that the tradable level for Chinese billet is hardly above the previous levels of $430-435/mt FOB for most trade destinations.
Ex-Indonesia official offer prices for billet have remained at $450/mt FOB after the $3/mt rise last week and “have remained unchanged and unimportant for some time,” an international trader said, because the main Indonesian mill is focused on HRC sales and billet prices are indicative. One of the Vietnamese major mills has been offering at $445/mt FOB.
With the recent increase in crude steel production in China and some improvement in demand ahead of the October holidays, the market prices are expected to fluctuate in a limited range with a slight positive bias. More positive moods may emerge later this week since “China will have a high-level hearing to promote consumption on Wednesday,” a Chinese source has noted.