Ex-China billet prices have continued to decrease, following continuous losses in the local market, making traders more aggressive and, as a result, the outlook for the Southeast Asian market in general has remained bearish, even though major ASEAN-based mills have kept offers for billet stable after the sharp drop last week.
Ex-Indonesia billet offers from the major domestic BF-based mill have remained at the levels of $565-570/mt FOB, similar to what was announced last week. “I believe they will accept lower bids. The problem is demand,” a Singapore-based trader said. There has been a rumor about a small lot sold to a trader at $560/mt FOB, but this has not been confirmed by the time of publication and most market sources agree that buyers are staying away from purchases from mills in such an uncertain market. "Some mills consider selling slabs instead of billets," an Asian trading source said.
At the same time, the tradable level for ex-China billet has lost $15/mt over the past week and $10/mt since late last week, coming to $550-570/mt FOB. “If Chinese traders are offering at $550/mt or around that in the local market, they can export at $555-560/mt FOB, which will be around $580/mt CFR Manila, the same as Dexin,” a trader said.
However, customers in Southeast Asia have been very silent, just coming back from holidays last week and still seeing bearish sentiments. Late last week, an offer for 5,000 mt of IF 5SP 130 mm billet was voiced at $560/mt CFR Manila, which is almost in line with traders’ previous sales of IF billet to the Philippines at $560-565/mt CFR early last week. However, today, there has been information in the market that one ex-Indonesia position cargo has been offered by a trader to the Philippines at $560/mt CFR as well, for May shipment. This price level has been assessed as too low even for the current weak market conditions. “I would say the market in Manila is still at around $580/mt CFR. A lower price is possible only from panicking traders,” another Asian source said. The SteelOrbis reference price for imported billet in Southeast Asia has been at $575-585/mt CFR versus $575-590/mt CFR late last week.
The average local billet price in China has declined by RMB 55/mt ($8/mt) over the past week to RMB 3,858/mt ex-warehouse, which translates to $496/mt, excluding 13 percent VAT. As a result, the reference price for imported billet in China has slipped below $500/mt mark again, to $495/mt CFR.