The uptrend in the Southeast Asian billet market has gathered momentum over the past week, but this has been supported mainly by rapid increases in China, rather than by demand in the region. As a result, even after the recent increase, the tradable level in SE Asia has been lagging behind import sales prices in China.
The SteelOrbis reference price for import billet in Southeast Asia, based mainly on import prices to the Philippines, has been increased to $630-640/mt CFR this week, up by $15-20/mt compared to last week.
A few deals for ex-South Korea billet were done at $630/mt CFR to the Philippines on Wednesday. “Generally, the Philippine buying price is $630-635/mt CFR,” a re-roller said. Nevertheless, such prices have been too low for the majority of sellers. And offers have all been above $640/mt CFR. This level is assessed by market sources as possible to accept for buyers in the Philippines who need to restock. But “it’s been rather silent this week in Manila. The Philippines cannot catch up to China's prices as there is not much of a market to support it,” a local trader said.
Another source added, “The domestic market is very weak. The acceptance level is around $640/mt CFR for billet. But $660/mt CFR [which has already been reached in China for ex-ASEAN billet] is absolutely out of the question.”
Billet sales from Russia’s Far East region have been reported only to China this week - about 40,000 mt have been sold at $650-655/mt CFR, up by $30/mt compared to the contract last week. Southeast Asia has not been providing high enough bids for Russian exporters and the number of enquiries have been very limited.
Indian mills have also been preferring the Chinese market. One of the Indian sellers was in the market with a 125 mm billet tender early this week, but was forced to cancel it due to low bids. It is unlikely that the target price level from India will be below $640/mt CFR in the near future.
Bids from other Southeast Asian countries like Indonesia and Thailand have been even lower than in the Philippines. “$620-630/mt CFR is workable for Indonesia. But no one is really buying here,” a major buyer in the country said. One small deal for ex-Iran billet from a trader has been reported at $610/mt CFR Indonesia this week.
The lowest offers for ex-Iran billet from traders have been heard at $615-625/mt CFR to Thailand, but it is hard to find bids at above $610/mt CFR.