The downtrend in the import billet market in Southeast Asia has continued and even accelerated over the past week despite holidays in some countries. Trading is still reduced as customers remain cautious in the falling market and believe that the bottom has not been reached yet.
Major ASEAN mills have dropped offers to the Philippines by $25/mt or even more since last week. A BF-based producer from Vietnam has offered billet at $715/mt FOB or about $750/mt CFR Manila, according to sources, which is $20/mt lower than the previous offer from the same mill and $25/mt below that seen last Thursday. Also, the main Indonesian BF mill Dexin Steel has been ready to sell at $742/mt CFR to the Philippines, while some said that an offer was heard at $750/mt CFR.
Ex-Indonesia offers to Thailand have been widely heard at $735-745/mt CFR recently, but no deals have been done since bids at much lower levels and cheaper ex-Iran and ex-Russia billets were available.
Such low offers for ex-ASEAN billet have been reflecting the very weak market conditions. Last week, a deal for an ex-Japan 3SP billet deal was said to have been done at around $755-760/mt CFR to the Philippines, though for now many sources said that the price is too high. “Demand is slow. Buyers are holding back, expecting further price cuts,” an international trader said.
As a result, the SteelOrbis reference price for imported billet in Southeast Asia has been lowered by $15-20/mt over the past week on average to $750-755/mt CFR.
Also, a deal for ex-Vietnam IF billet has been heard at $740/mt CFR to the Philippines, though this could not be confirmed by the time of publication. This is much lower than the previous offers at $757-760/mt CFR for IF billet from the ASEAN region.
After a long pause, one of the customers in the Philippines decided to take a risk and to buy ex-Russia billet from one of the major Russian mills, Evraz, shipping its material from Russia’s Far East. A contract was signed at $700/mt CFR Manila last week, according to a number of sources in Asia. Previously, an offer from Evraz was at $740/mt CFR and all negotiations failed over the past few weeks. An offer for ex-Amurstal billet has been heard at $725/mt CFR from a trader. Market sources said that the risks for buying ex-Russia billet in the Philippines are still very high, especially in terms of payments as the sides need to find a bank in Asia ready to work with Russian material and payment not in US dollars, while the possibilities of a deepening of sanctions still exist. The main reason why some customers are risking and buying ex-Russia billet is price. “Now Russia is even cheaper than Iran,” a trader said.
A position cargo of ex-Iran billet has been offered by a trader to Thailand at $705/mt CFR, which is the lowest offer possible for ex-Iran material, while offers for shipments in June are still hardly below $720/mt CFR. There is an offer “below $700/mt CFR, but a trader refused to disclose the details. I guess it might be Russian origin via a Chinese trader or out of a Chinese warehouse,” a source from Bangkok said.