The latest offers from traders, who are trying to redirect position billet cargoes initially bought for China, have gone down further to Southeast Asia. Moreover, the additional decline seen in the Chinese billet market has also added to bearish sentiments in the market.
Offers for ex-India and ex-Indonesia 3SP/4SP150 mm billet have been reported at $650/mt CFR, down by $10/mt compared to the previous deals concluded for position cargoes to Southeast Asia last week. No deal at this level has been heard so far with bids mainly at $640-645/mt CFR for these cargoes. “There are still position cargoes available, so prices are under pressure,” an Asian trader said.
Last week, a deal for 10,000 mt of position ex-Thailand IF billet was rumoured at $660/mt CFR Manila, though a number of sources said it is a fairly high level for such material. At the same time, a not very frequent sale of 150 mm billet was also heard to the Philippines last week at $670/mt CFR. The latter was to SteelAsia’s Davao plant, so with the higher freight this price corresponds to around $660/mt CFR Manila maximum. But with lower offers available from traders, the current reference price for imported billet has been cut by $10/mt from last week to $650-660/mt CFR Southeast Asia.
Even though most mills in the region have not been as aggressive as traders so far, offering at $675-690/mt CFR, a further decline is inevitable if they want to attract customers, market sources believe.
In the local Chinese market, prices for billets have continued to seek lower levels due to weak demand and futures losses, pushed by coke prices. While Tangshan mills’ prices have remained at RMB 4,900/mt ex-works, not reflecting the real market conditions for now, the tradable prices have slumped to RMB 4,470/mt ($700/mt) ex-warehouse, down by minimum RMB 230/mt ($36/mt) from a level seen earlier last week. This translates to $619/mt, excluding 13 percnet VAT.
In such conditions, the import billet price level in China has also moved down further - by $20-25/mt over the past week to $610-615/mt CFR.
$1 = RMB 6.3903