Following a few weeks of stability, ASEAN region-based mills have lowered billet prices to push volumes in the export market. This happened as the revival expected earlier in the Chinese market has not happened and steel futures prices have been going down, even despite some news about government support of the economy expected in May. Nevertheless, the future price trend is doubtful as producers may keep their prices at the current levels for some time, watching developments in China.
Ex-Indonesia billet offers for July shipment have been reported at $495-500/mt FOB this week, down from up to $510/mt FOB last week. “Basically, the market was expecting deals at below $500/mt FOB [level in previous bookings over the past two weeks], and it happened,” a trader said. Deals for up to 35,000 mt of Indonesian billet in total have been signed at $490-493/mt FOB, signaling a decline of about $7-10/mt from the previous deal price. The deals include mostly 150 mm billet. “Some position-taking and back-to-back business is happening. We may not yet be at the bottom, but currently some traders see profitability at the current prices,” an international trader said. Another Singapore-based source said that Dexin’s prices are the most competitive at the moment as Chinese sellers are not active.
SteelOrbis reference price for ex-China 3SP billet has remained at $500-510/mt FOB, so “all the focus [from traders] is on ASEAN billets,” a trader said. Though early this week China’s Ministry of Finance (MOF) issued arrangements relating to the issuance of general treasury bonds and ultra-long special sovereign bonds in 2024, aiming to support the real economy, steel and iron ore futures prices have been going down. Rebar futures at Shanghai Futures exchange lost 0.77 percent today, May 15. “Sentiments are still not firm, but somehow physical prices in China are not dropping as fast as futures,” another Singapore-based source said. Because of this, some ASEAN-based mills like Dexin Steel have been resisting repeating deals at below $495-496/mt FOB.
In the Southeast Asian market, the mood is still cautious as bids have remained low, while offers have been softening much slower than customers expected. The latest bids for 5SP billet in the Philippines have been heard at $515-517/mt CFR, versus $520/mt CFR as the tradable level last week. Offers are still at $520-525/mt CFR for open origins, though to some buyers, in Thailand in particular, offers from traders have been reported at $515/mt CFR.
One distressed cargo of Iranian billet is heard to have been booked at $505/mt CFR to Indonesia. “This is a fair price for buyers,” an importer commented. Bids for ex-Russia billet in Taiwan have been heard at the same level, while offers have been at $510/mt CFR.