The downtrend in the import billet market in Southeast Asia has been gaining pace amid aggressive offers by traders, going short, as they are sure that mills will cut prices more in the near future. At the same time, demand in most countries in the region has been critically low, putting pressure on sentiments, SteelOrbis has learned from the market on July 21.
Short position offers from traders for ex-ASEAN (EAF or BOF) billet have been reported at $530-535/mt CFR to the Philippines this week. With the current freight, this level translates to around $500-505/mt FOB from Indonesia or Malaysia. “There are no bookings here as buyers are cautious in the falling market and with such a bad situation in finished steel,” a source from Manila said. “If Indonesia’s Dexin doesn’t provide the tonnage, a trader could switch to Malaysian billet. So, these are all short position offers [at such a low level],” another source said.
Moreover, ASEAN mills have been offering at higher levels, at $510-520/mt FOB, which translates to $545-550/mt CFR Manila. “But sentiment is really bearish. Scrap prices also keep going down,” a trader said.
In such market conditions, a few deals have been rumoured from Indonesia-based Dexin Steel and Malaysia’s Alliance Steel to traders at $500-505/mt FOB, but this could not be confirmed by the time of publication. A source said, “Traders are pushing the market to this level, but just yesterday an offer from Alliance was at $515/mt FOB.”
To other Southeast Asian countries - Thailand and Indonesia in particular - offers for ex-ASEAN billet from mills have been reported at $540-550/mt CFR, while lower levels down to $530-535/mt CFR are available from traders in short positions.
At the same time, ex-Iran billets have been offered by traders to Thailand at $520/mt CFR with no response so far. “The Thai market cannot afford to pay such price levels. Nobody wants to buy as all want to destock to get liquidity. With today’s rebar price, buyers cannot pay higher than $470/mt CIF,” a local trader said.
Traders have also tried to collect bids for ex-Russia billet at $530/mt CFR in Southeast Asia, which has been assessed as too high for the current market for buyers.
The SteelOrbis reference price for imported billet in Southeast Asia has declined to $530-550/mt CFR with the midpoint at $540/mt CFR, which is $20/mt below last week.