Prices for ex-ASEAN billet have been stable this week so far despite the continued weakness of the Chinese market. The main reason for the stability is the good condition of order books and the limited allocation left for April shipment. At the same time, the import billet market in Asia has moved down, following China.
The main Indonesian mill has started to offer May shipment billets this week, leaving prices stable at $520/mt FOB. Last week, additional sales from the producer were done at $515/mt FOB, a similar level to the trades for over 100,000 mt of billet in the previous ten days. So out of the monthly allocation for exports of 300,000 mt minimum, a half has been sold now. That is why the seller is not in a hurry to cut billet prices. Though the seller has voiced offers for May shipment and is eager to keep prices stable, market sources all report a decline in demand from both traders and end-users. Moreover, it is reported that ex-Malaysia billet prices are assessed at $515-520/mt FOB, but with a lack of firm offers.
At the same time, the ex-China reference price for 3SP billet has been lowered by a further $5/mt early this week to $505-510/mt FOB. “Sentiments are still very bad now, both within China and in the international market. Stimuli [new bonds announced new at the National People’s Congress today] are not sufficient to excite the markets," a trader said. A few market sources said that traders have started to bid at $500/mt FOB or so this week.
The weakness in the Chinese market has led to decline in Southeast Asia with the reference price softening to $530-535/mt CFR, versus $535-540/mt CFR last week. A deal for 10,000-20,000 mt of ex-China 5SP 150 mm billet has been heard at $531/mt CFR Manila, done last week. The previous contracts for this destination were not below $535/mt CFR, but new bids have been reported today at $525/mt CFR at the highest.
Also, there has been a report that the Indonesian buyers have purchased a lot of 5SP billet from Iran at $521/mt CFR, down from the previous traders’ offers at $530/mt CFR and above. This price translates to around $485/mt FOB.