Chinese billet offer prices have increased in tandem with the rising Shanghai steel futures market, Kallanish notes. However, in the absence of a strong steel demand recovery in China and the region, the uptrend may not last, some regional trading sources say.

Offers for Chinese 3sp billet are at around $485/tonne fob. Trading sources hear that a large tonnage was booked last week before the futures price rebound this week. A regional trader heard around 200,000 tonnes were transacted at as low as $475/t fob. China-origin 3sp billet was booked at about $490/t cfr Taiwan last Friday, a Kaohsiung trader reports. He does not know the tonnage or other details, but adds that freight is at around $15/t.

“Market pundits are saying the Chinese government has committed to supporting the steel industry, which is supposedly driving the market since yesterday,” a Manila trader said on Tuesday. He does not think market fundaments have changed. “Haven’t they been saying that for the longest time?” he asks.

The price volatility in Chinese steel futures is causing buyers to withhold purchases. “It’s a very confusing situation,” a trader in Singapore says. Buying interest is thin, a Manila trader notes. “Everyone has inventory,” he adds.

“The mills are trying to increase prices,” another regional trader observes. A leading Indonesian mill said on Tuesday it was also targeting a similar export price of $485/t fob and had rejected a bid at $475/t fob. The mill was understood to be waiting for a positive outcome from a meeting organised by China’s Ministry of Industry & Information Technology (MIIT) on Tuesday. Numerous Chinese mills were invited to the meeting and suppliers are hopeful that concrete steps will be announced to address the current steel oversupply situation in the country.

By Tuesday evening, trading sources shared that the meeting did not yield any concrete decisions to cut steel production. Meeting participants discussed reducing output, targeting illegal plants and those which consumed high energy, a Chinese trader says. “There are no firm measures yet,” he adds.