Demand for imported billet has improved visibly in Southeast Asia this week with up to 55,000 mt sold to the Philippines since late last week. Prices hit bottom last week and higher levels have been reported in recent transitions.
In particular, major Vietnamese producer Hoa Phat traded 20,000 mt of 150 mm billet at $675/mt CFR late last week, SteelOrbis has learned. In addition, another Vietnamese producer has managed to sell 25,000 mt of 130 mm billet, which is more popular in the Philippines, to a few buyers at $675-680/mt CFR Manila. One source said that, in addition to these deals, 10,000 mt of ex-ASEAN billet have also been sold at $676/mt CFR. “Buyers in the Philippines restocked. Four or five customers bought some tonnage,” a source said. However, the overall fundamentals in Southeast Asia have not improved much, sources have said, as long steel demand is still reduced because of the pandemic.
No fresh deals have been reported to Thailand and Indonesia, with most offers coming at $670-680/mt CFR. “Local demand is not providing support yet. We might see some changes in early September after government relaxation of restrictions for the pandemic,” a Bangkok-based trader said. An indication for ex-Iran billet has been heard at $675/mt CFR, but there is still a lack of firm offers.
Some sales at $675/mt CFR have also been reported to Taiwan this week.
Indian suppliers have been asking for at least $700/mt CFR Southeast Asia and the lower levels at $680-690/mt CFR have been heard only from smaller mills.
The future price trend in Southeast Asia’s import billet market will mainly depend on the developments in China, most market sources believe. “If China starts buying actively again (which I believe they should), Southeast Asian buyers will not have much option but to follow the price,” an international trader said. “We're not out of the woods yet. Any time China rings the bell that they will cut production or stop buying semis, the market reacts. We (Southeast Asia) get hit always by a simple sneeze from China. They sneeze, we catch colds,” a market source from Manila said. Today, the local billet price in Tangshan is stable at the equivalent to $677/mt, excluding 13 percent VAT, and rebar futures have retreated again on August 26, and so in the near future import billet prices to China may stabilize for some time, market source believe.
The SteelOrbis reference price for imported billet (excluding IF) in Southeast Asia has increased by $10-15/mt over the past week after two weeks of sharp declines, reaching $675-680/mt CFR.