Continued weakness of demand for billets in Southeast Asia and price drops in the Chinese market have resulted in a sharp decline in import billet prices in the region. First traders and then mills have cut offers to below $600/mt CFR, market sources told SteelOrbis on Thursday, June 23.
Offers for ex-ASEAN EAF/BOF billets of 130 mm and 150 mm have been reported at $575-590/mt CFR Manila this week depending on the supplier, dropping by $65-70/mt from last week. “Billet prices have suddenly collapsed in the last two weeks. This is a sign of loss of confidence in the steel market. It is hard to say how long the gloomy mood will persist. The war in Ukraine and the poor Chinese economy are pulling down market confidence,” a re-roller from the Philippines said. Another source from Manila confirmed that two major factors behind this drop were weak demand in Southeast Asia and the negative situation in China with the absence of demand for imported billet there.
Early this week, mostly traders were testing the market with lower offers below $600/mt CFR. One South Korean trader was offering open origin BOF billet at $590/mt CFR and some Chinese traders voiced firm offers at $580-590/mt CFR Manila. But by the end of the week, mills’ offers have also come down, reflecting the gloomy outlook. For instance, one Vietnamese mill has offered at $560/mt FOB, translating to $585-590/mt CFR Manila. Also at least one source said that Dexin has come out with offers at $575-585/mt CFR to the Philippines depending on the billet size and grade on Thursday.
There has been no information about new deals in the market, only one sale at $610/mt CFR Manila done late last week has been heard, but not confirmed. “Everyone is really quiet. Even if somebody buys, it'll be a really small quantity, just to try to average out their high-priced cargos booked earlier,” a trader said. New bids from the customers from the Philippines are expected at $570-580/mt CFR at the highest, sources have told SteelOrbis.
In other markets in Southeast Asia, Thailand and Indonesia in particular, offers for ex-Iran billet have come to $570-580/mt CFR. “Buyers’ target price is below $580/mt CFR for any origin,” a source from Bangkok said.
There has been a lack of firm offers from Russia this week. Sources said that offers to the Philippines and Thailand are at $570/mt CFR with no interest, while the indicative level to Taiwan has been heard at $550-560/mt CFR. As reported earlier, the last deal for ex-Russia billets was done to China at $535-540/mt CFR last week, while now bids in the country have come to $510-520/mt CFR at the highest.
The SteelOrbis reference price for imported billet to Southeast Asia has dropped to $575-590/mt CFR, down by $60-65/mt over the past week.