Sentiment for Chinese billet in export markets in Southeast Asia has not improved despite a slight rebound in China’s domestic billet market.
Suppliers were continuously lowering export offer prices to entice buying this week, regional trading sources said April 19.
They said traders who are shorting the market are the main culprits for the market plunge.
In Manila, offers for 120/130mm Q275 billet from China were heard at $390-395/mt CFR, down $20/mt from April 17.
Analysis continues below...
The offer at $390/mt CFR was for late May or early June shipment, a Manila trader said. He said that the quick fall in prices was spooking buyers.
Many buyers are bearish, so they prefer to wait, another said.
Buyers are giving indicative bids at $380/mt CFR Manila for 120mm Q235 grade billet and at $384/mt CFR Manila for 120mm Q275 grade billet, a Chinese trader said.
Despite an increase of Yuan 40/mt ($6/mt) in Tangshan billet prices to Yuan 2,720/mt on April 19, market sources in China and Southeast Asia were unconvinced that the market had completely turned around.
"Traders are bearish for the near future so they are still selling short," a source with a Chinese mill said.
Over the past week, Tangshan billet prices had fallen overall by Yuan 130/mt from Yuan 2,850/mt the previous April 19.
Prices fell continuously for four days from April 15 to April 18, with the price drop totaling Yuan 200/mt.
Trading sources in Southeast Asia said that they would be monitoring spot iron ore prices closely over the next few days as these were a key factor which might lend support to steel prices.
Earlier in the week, market chatter revolved on the prospect of iron ore prices breaking the $60/mt mark and some spoke of iron ore prices even touching $50/mt, they said.
Platts analyzes other steel and scrap products in this feature:
Iron ore | Scrap | HRC | Rebar | Semi-finished | News
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