Import billet prices in Southeast Asia have decreased this week amid active offering by Chinese traders, given the bearish sentiments in the local Chinese local market. At the same time, buying activity has been rather slow in Southeast Asia as some buyers believe that offers may decline further.
The SteelOrbis reference price for import billet in Southeast Asia (both 3SP and 5SP) has been lowered to $471-482/mt CFR, with the midpoint at $476.5/mt CFR, down by $11/mt over the past week.
The lower end of the range corresponds to a deal signed for Chinese 3SP with an Indonesian end user reported at $471/mt CFR early this week. Most offers for 3SP in Southeast Asia have been reported at $474-477/mt CFR, as confirmed by market sources in Indonesia and Thailand today, November 14. “No fixtures yet. I think buyers want to bet below $470/mt CFR,” a source in Bangkok said.
In the Philippines, offers for 5SP billet have been reported at $480-482/mt CFR Manila, mainly for Chinese origin. There have also been offers for Indonesian and Vietnamese billets in the Philippines from traders who took positions for shipments in November and December. But “they have to be in line with China [origin], if they want to be competitive. Traders do not have much time now [as the loading time is close],” a Manila-based source said. The current offers for 5SP billet in the Philippines are in line with buyers’ previous price ideas, but customers are not in a hurry to conclude deals, having normal stocks and hoping to get additional discounts. Some importers in Indonesia have claimed they are getting offers for 5SP at slightly below $480/mt CFR.
Chinese mills have been more active in offering billet for export as, even though costs have remained relatively high, the depreciation of the RMB has given them an advantage. But for now, market sources do not see the possibility of prices declining below $450-455/mt FOB.
Offers from the ASEAN mills have been reported at $470-480/mt FOB for base grades and the lowest deal price was at $468/mt FOB from Vietnam last week. There have been negotiations for 60,000 mt of higher-grade billet for Latin America. But market sources believe that at least half of the total volume will be taken from Brazil at a better price. With the freight and grade extras, ASEAN billet offers to Latin America will hardly be below $545-550/mt CFR, while from Brazil buyers may get $530-535/mt CFR.