Chinese billet offer prices have risen in tandem with the increasing Shanghai steel futures market, Kallanish reports. However, regional trading sources suggest that the uptrend may not be sustainable, given the lack of a strong steel demand recovery in China and the broader ASEAN region.Offers for Chinese 3sp billet are currently around $485 per tonne FOB. Trading sources indicate that a large tonnage, estimated at around 200,000 tonnes, was booked last week at prices as low as $475 per tonne FOB before the recent futures price rebound. A Kaohsiung trader reported that China-origin 3sp billet was booked at approximately $490 per tonne CFR Taiwan last Friday, with freight costs around $15 per tonne.A Manila-based trader expressed skepticism about the market fundamentals, stating that "market pundits are saying the Chinese government has committed to supporting the steel industry, which is supposedly driving the market since yesterday." However, he does not believe the underlying market conditions have changed, questioning whether the government's rhetoric has been a recurring theme.The volatility in Chinese steel futures is causing buyers to hold back on purchases. "It's a very confusing situation," a trader in Singapore remarked, as buying interest remains thin. "Everyone has inventory," a Manila trader added.Despite the market uncertainty, ASEAN mills are targeting higher billet prices. A leading Indonesian mill stated on Tuesday that it was aiming for an export price of $485 per tonne FOB and had rejected a bid at $475 per tonne FOB. The mill was reportedly waiting for a positive outcome from a meeting organized by China's Ministry of Industry & Information Technology (MIIT) on Tuesday, where numerous Chinese mills were invited to discuss measures to address the current steel oversupply situation in the country.However, by Tuesday evening, trading sources shared that the meeting did not yield any concrete decisions to cut steel production. The participants discussed reducing output, targeting illegal plants, and those consuming high energy, but no firm measures were announced, according to a Chinese trader.As the ASEAN steel market navigates the volatile Chinese steel landscape, mills in the region are actively seeking to raise billet prices, though the sustainability of this trend remains uncertain.
