Posted on 14 Aug 2024
The billet market is sinking in China and ASEAN, Kallanish notes. Ever-falling Chinese domestic billet prices are weighing heavily in the ASEAN market where regional producers are being forced to pare down prices to remain competitive.
Trading sources in China say that demand for billet is subdued due to a wide bid offer-spread caused by slumping steel futures. The spread was at $8-10/t on Tuesday with bid at $450/t cfr Ko Si Chang, Thailand while offers are down to as low as around $440/t. The incessant fall in China's futures has caused buyers to be more cautious about restocking. While the current downturn could pause soon, some traders remained pessimistic about the longer term.
Despite the slump in the Chinese futures, many Chinese mills have been reluctant to export at this level because of the appreciated CNY against the US dollar. Some 3sp 150mm square billet from eastern China was booked at $440/t fob, an offer level which started floating in the market on Monday, some Chinese traders hear. “Today billet dropped by CNY 40/t ($6/t),” a Chinese trader notes.
An Indonesian mill last Friday sold a large tonnage of 3sp 150mm billet to Turkey and ASEAN at $450/t fob. It is believed that its offer has come down in tandem with China’s negative market. The regional trader hears the mill at $448/t fob already. A Jakarta trader says that the mill will “100%" lower its offer “but they didn’t tell us yet.” The mill’s offer for 5sp 150mm billet is heard prevailing at $465/t cfr Taiwan.
In Philippines offers for 3sp 150mm open-origin billet from China/ASEAN are at $460-465/t cfr Manila, local trading sources say. Offers were around $470/t cfr last Friday. In Vietnam, a leading producer lowered its official billet price from $475/t to $465/t fob. The mill's export prices are typically set at above market rates.
Source:Kallanish
