Demand from Southeast Asian billet importers has started to revive following the easing of restrictions in the Philippines. Customers have been forced to accept higher prices in deals, which have been driven by Chinese buying.
A deal for about 40,000 mt of ex-Russia billet from the Black Sea region has been done to the Philippines at $398-400/mt CFR Manila recently, sources have said, which is $10/mt above offers for ex-CIS billet heard to the country last week. “This means that not only China can accept the higher price,” a trader has said. This deal level has been the highest in the market so far and the shipment in it is much earlier than any other CIS-based mills can offer, sources have said. At the same time, many buyers have said that the workable level should be at about $390-395/mt CFR Manila at the moment. Negotiations for billets from Russia’s Far East have been at about $390/mt CFR in the Philippines earlier this week.
Most recent offers to the major end-user in the Philippines have been at above $400/mt CFR, SteelOrbis has learned, for billets from the CIS, India, Vietnam and South Korea. Another mill has said that it received offers at $395-400/mt CFR. Demand from the Philippines has not fully improved yet and further import billet purchases will depend much on the revival of construction works and the level of inventories at rolling mills. “We are not yet buying as we still have enough stocks,” a source from Manila said.
The number of offers to customers in Thailand and Indonesia has been smaller than last week due to weak demand. The indicative price level for non-Iran billet has been at $390/mt CFR or above in Indonesia. “There was no buying last week, and so this week suppliers are not active in offering higher prices,” an Indonesian importer said. Moreover, from May 21 holidays have started in Indonesia and most buyers have left the market. Buyers in Thailand confirmed that they received offers at $395/mt CFR and higher for Indian and CIS billet, but bids are much lower. Offers for Iranian billet have increased by $10/mt over the past week to $380/mt CFR Thailand.
The further price trend in the Asian billet market will depend mostly on the situation in China. Chinese traders have said that, while local billet and rebar prices in China have stopped going up, it is unreasonable to buy imported billet at higher prices.