Business activity in the billet market in Southeast Asia has been slowing down this week with the approach of the holidays. Still, workable CFR prices in the region have remained relatively stable over the past week, based on deals to customers who needed to restock. In the meantime, at least one Vietnamese mill has decided to provide some discounts from its previous high offers to push high volumes, though most producers in the ASEAN region continue to voice higher FOB targets, counting on a better market after the holidays.
According to sources, a lot of 10,000 mt of ex-Indonesia 5SP billet from a trader has been traded to the Philippines at $563/mt CFR Manila. Last week, deals were also reported at $560-565/mt CFR, which signals stability, SteelOrbis understands. Also, another deal done early this week has been heard at $565-567/mt CFR for ex-Indonesia billet as well. "BF billet prices of other origins are unworkable," a source from Manila said.
On the mills’ side in Southeast Asia, some producers are still insisting on high levels, targeting not lower than $550-555/mt FOB. In particular, a large Indonesian mill is aiming for $580/mt CFR SEA, which is around $555/mt FOB. Such levels are considered to be overpriced for now, given the current market conditions. In fact, there has been a sale from Vietnam for 40,000 mt of BF 5SP billet at $540/mt FOB to a trader with no further information regarding the final destination. Taking into account the average freight of $25/mt, the CFR price excluding the trader’s margin is estimated at around $565/mt CFR Southeast Asia, which fits the currently workable price range in the region.
The SteelOrbis reference price for imported billet in Southeast Asia has increased by $5/mt on the lower end and $2/mt on the upper end over the past week to $560-567/mt CFR, based on the generally firm market sentiment and rather positive expectations for early January 2023.
