The price trend has reversed in the Southeast Asian billet market by the end of this week. Customers have been more cautious in purchases, while the gap between offers and bids has widened, exerting pressure on suppliers’ positions. Moreover, the outlook for demand for imported billet in China after the long holiday (October 1-8) is mainly negative, which has also hurt sentiment.
SteelOrbis’ reference price for imported billet in Southeast Asia has been lowered by $5/mt from early this week and by $2.5/mt on average from last week to $445-450/mt CFR.
One trader reported an ex-Russia billet sale at $450/mt CFR Manila recently and, though this has not been confirmed by the time of publication, most market participants have said that sentiment has recently worsened visibly. The deal late last week for Russian material was at $455/mt CFR to the Philippines, as SteelOrbis reported earlier. Most offers have been coming at $450-455/mt CFR for Russian, Indonesian and South Korean billet, and one offer for Indian origin billet has been heard below $450/mt CFR. But bids have fallen to $440-445/mt CFR. “Demand is there, but buyers want to get lower prices,” a source said. “Sentiments are generally weak due to China weakening. Most buyers are in wait-and-watch mode,” another trader said.
A contract for 30,000 mt of more of ex-CIS billet from the Black Sea region has been confirmed as having been signed last week at around $445-450/mt CFR to a trader. Other exporters from the Black Sea may also turn to sales to Asia in the future, but for now they are mostly in a waiting position.
Bids from other Southeast Asian countries, like Thailand and Indonesia, have been at $440-445/mt CFR and not higher.
Chinese traders believe that China will not import billet and HRC after the holidays at the same pace as before “or prices will be very low”, a source said. So demand will be coming only from Southeast Asia. Late this week, domestic billet prices in China have stabilized after the RMB 50/mt ($7/mt) drop last weekend. For the coming week, China will not influence the Asian billet market, and so prices will mainly depend on the supply-demand balance in Southeast Asia.