The Southeast Asian billet market has remained very weak even though some increase in futures prices has been seen in China. Limited demand and only low bids have resulted in further declines in prices in the Philippines.
According to market sources, a deal for 5SP billet has been done by a Chinese trader at $510/mt CFR Manila today, in line with the bids heard earlier this week, but down from the reference price at $525-535/mt CFR, which represented most offers for EAF/BF billet. “The price is reasonable for buyers, but I have not heard offers for BOF billets of any origin below $527/mt CFR,” a source from the Philippines said. Some market sources said that this was for ex-China origin billet and it reflected poor sentiments as a trader concluded the deal in a short position. However, some other sources believe that this could be IF material or billet with lower manganese content. There has been no confirmation about the origin of the material in a contract by the time of publication.
Nevertheless, the worsening of the market situation is clear by the end of the week. “In two words.. no demand… Wire rod is now being offered at $540-545/mt CFR Manila. What price then should we give for billet?” a Manila-based source said.
Official offers from ASEAN mills have been reported at $530-535/mt CFR in Southeast Asia. “Dexin lowered their offer to $510/mt FOB. The reason is that they were holding prices stable artificially previously, but there have been no transactions at all, so the previous price was not real. Now this price is a fair market price. Also, Shanghai futures were swinging around but their level has actually been flat week on week,” a Singapore-based trader said.
The SteelOrbis reference price has been lowered to $515-535/mt CFR with the midpoint at $525/mt CFR, down by $5/mt on average from earlier this week and down $12.5/mt over the past week. The price represents offers, bids and the recent tradable level, while the lower-priced deal has not been included in the range since the quality of the material has remained unclear.
