Buying activity has remained muted in the Asian billet market this week, but bearish sentiments have led to many speculations about new transactions, especially for ex-CIS material. The SteelOrbis reference price for import billet in Southeast Asia has inched down by $2-5/mt over the past week to $438-440/mt CFR, but mainly due to lower bids and worsening of sentiment, than confirmed transactions.
Offer prices from major suppliers from the CIS and Southeast Asia to the Philippines are still not lower than $440/mt CFR. There have been reports of a sale of Russian origin billet by a trader at $438/mt CFR Manila for February shipment. But most sources agree that it was “a stressed cargo,” which appeared in the market “accidentally.” Most producers from the Black Sea region may offer for only March or April shipment and there have been no offers from any mill below $440/mt CFR so far. Suppliers from Russia’s Far East have not been in a hurry to sell and have been offering above $440/mt CFR for March shipment. “SteelAsia can purchase, but the prices are not good for exporters,” a trader said.
There have also been sales of ex-Ukraine and ex-Belarus billet from stocks from $440/mt CFR to $430/mt CFR “in the last few days,” according to a Filipino re-roller. But this price level does not reflect the recent mainstream offers and the shipment will be earlier than in March. Moreover, some traders, familiar with the sale, said that this transaction for 15,000 mt of ex-CIS billet from stocks was done a long time ago - in late December - and disclosed to the market just now, reflecting customers’ price idea for the coming contracts.
There has been also a rumour of the deal of ex-CIS billet at $427/mt CFR Manila, which has been denied by both seller and buyer sides and illustrates the rising speculations in the market, where bearish moods persist.
Another rumour of an ex-Ukraine sale to Indonesia at $430/mt CFR has also been denied by all major market participants. “There are no such offers yet. Most are still at $440’s/mt CFR,” a major importer in Indonesia said. Offers from Qatar have also been heard in Indonesia, but no deal has been done as the supplier has suggested the buyer’s price idea is too low to sell.
Speculations have actively spread in Asia as there have been a lack of firm offers from major exporters, sources believe. The indicative price for ex-Iran billet has been at $430/mt CFR Thailand. But firm offers from other countries, Malaysia for example, have been at $445/mt CFR Thailand. The downtrend in the scrap market and the worsening outlook for China, which is unlikely to show any demand for import billet in February, have been weighing on sentiments.
