Prices for import billet in the Southeast Asian market have declined once again this week, following the continuing downtrend in China, and have settled at below the $500/mt CFR mark. Chinese billets have been gaining some attention among buyers with a few deals done, while most other origins have remained less competitive.
A deal for 20,000 mt of ex-China 5SP 150 mm billet has been done at $489/mt CFR recently, down from offers at $495/mt CFR early this week and last week’s reference price of $497-505/mt CFR. “Steel producers are all operating on thin margins or experiencing operational losses. But this will not stop prices from falling, if demand also keeps falling,” a Manila-based source said. Some offers from China have been heard at $490-495/mt CFR to the Philippines today.
Another contract, also for 20,000 mt of ex-China 5SP billet, was signed at $491/mt CFR to Indonesia earlier this week. Negotiations for 3SP billet are still in place at $486-487/mt CFR and one Jakarta-based source said that a deal may be signed soon.
The ex-China 3SP reference billet price has settled at $470-480/mt FOB. With the freight at $20/mt, most offers to Southeast Asia at below $490/mt CFR from traders could be considered as short positions. Even though today steel futures have rebounded a little, negative moods due to the still weak demand in China have persisted. However, “prices have already fallen a lot. I don’t know how much lower we can go,” a Chinese mill source said.
At the same time, other Asian billet suppliers have been not so active. The latest official Indonesian offers have been at $485/mt FOB, and one Malaysian offer has also been offering at the same level. However, after Chinese sales, market sources agree that $480/mt FOB would be easily achieved from ASEAN mills, but not interesting for buyers as it translates to near $500/mt CFR in Southeast Asia.
The SteelOrbis reference price for import billet in Southeast Asia has settled at $486-495/mt CFR, falling by $10.5/mt on average over the past week.