Prices for imported billet in Southeast Asia have increased this week, with a number of deals for induction furnace (IF) materials signed at higher levels. Though overall resistance from customers has persisted and today futures prices have dropped in China, impacting sentiments, the absence of cheaper options of billets in the Asian market and the need to replenish stocks after the previous slow weeks have resulted in price rises, as SteelOrbis has learned on March 16. Some deals have also been signed by traders for long positions as they are trying to secure May shipment volumes for future sales.
Deals for ex-ASEAN 5SP 130 mm IF billets, mainly ex-Vietnam, have been done to the Philippines at $625-630/mt CFR since last week. The last contracts have been confirmed at $630/mt CFR, though late last week the deal price level was slightly below. This is up from the previous IF billet sales to Manila at $620-623/mt CFR, signaling a rise of up to $7-10/mt from the previous sales. Though the total volume of billet sold in the last round has not been confirmed by the time of publication, some sources have said that as much as 50,000 mt have been traded at the abovementioned range, though some market sources have been saying that the volume was smaller, at 20,000-30,000 mt. Moreover, up to 30,000 mt of IF billet have been booked by traders for future sales to end-users. “I would not say that China’s futures drop was sharp and it is just one day. We have significant bookings already for May shipment,” a trader from Manila said. Accepting a slightly higher price for IF has been a move by buyers to avoid sharp hikes in the future for EAF/BF billets, as suppliers will insist on higher prices, according to sources.
“Billet offers have not yet dropped [reacting to China’s futures drop]. Till yesterday, they were increasing,” a Manila-based re-roller said. According to market sources, the current tradable level for 5SP EAF/BF billet in the Philippines is at $635/mt CFR, up from bids mainly reported at $620-625/mt CFR last week. At the same time, offers for such material from China and the ASEAN region have been reported at $640-655/mt CFR with the lower end of this range corresponding to a Chinese trader’s position.
The SteelOrbis reference price for imported billet in Southeast Asia has been increased by $7.5/mt on average from last week to $635/mt CFR, while the price does not include IF deals.
Even though the pace of the increase of CFR-based prices in the Southeast Asian market has been small, some new deals have been reported from ex-ASEAN mills on FOB prices to traders with the level assessed as relatively high as they were targeted by producers for weeks. In particular, the major ex-Indonesia mills and at least one ex-Vietnam EAF mill have closed a few trades at $630/mt FOB and these positions, according to some sources, are also for the Philippines but for future sales. Though the market developments in March in Asia have been mainly disappointing for sellers, expectations for April are still positive, though a lot will depend on the situation in China.
The average local billet price in China has lost RMB 68/mt ($10/mt) today to RMB 4,065/mt ($588/mt) ex-warehouse.
$1 = RMB 6.9149