Offer prices for billet in Southeast Asia have increased this week after some sellers have managed to raise prices in deals to China. Demand from Southeast Asia has remained muted and bids are still low.
The tradable levels for imported billet have increased to $380-385/mt CFR China this week, up by about $10/mt compared to last week, while a cargo from Vietnam has been traded at above $390/mt CFR China.
A small tonnage from Russia’s Far East has been sold at $382/mt CFR China, as SteelOrbis reported earlier. About 30,000 mt of Indian billet has been traded at $385/mt CFR, according to the rumours starting early this week. Also, more than 50,000 mt of ex-Oman billet have changed hands at above $380/mt CFR, but the final deal price has not been confirmed by the time of publication.
New ex-CIS offers have been heard at $385-388/mt CFR China and negotiations are ongoing.
A few large lots of Vietnamese billet (with the total tonnage exceeding 120,000 mt) have been sold to China at $385/mt FOB, which is equivalent to $390-395/mt CFR, sources have said. Though this price has been much higher than in bookings of billet of other origins, Southeast Asian billet has no 2.5 percent import duty like Indian or Russian billet. So, as a result, the deal from Vietnam is in line with $385/mt CFR for billet from other countries.
As a result, import billet offers have increased sharply to Southeast Asian customers, even though demand has still been at minimum levels. Offers from Russia’s Far East to Southeast Asia, to the Philippines in particular, have been at $388-390/mt CFR, while some other exporters have been giving $385/mt CFR. “There are not many mills offering to the Philippines. If customers there want to buy, then they need to accept above $385/mt CFR to compete with China,” an international trader said. The difference between import billet prices in China and the Philippines is up to $10/mt due to higher freight to the Philippines and the preferred billet quality difference of customers.
Some rolling lines in the Philippines will resume operations next week as, despite the lockdown having been extended until the end of the month, “the government guidance allows it after tomorrow,” a local trader said on Thursday, May 14. Though offer prices have increased visibly recently, bids are still below $380/mt CFR so far.
Offers to Thailand and Indonesia from CIS suppliers, including those from the Black Sea region, have been at $380-385/mt CFR for July shipment, local sources in these countries said. But “no one will pay higher than $370/mt CFR. We might consider $365/mt CFR as taking the local rebar price the CFR billet price can be only $368/mt,” one of the Bangkok-based buyers said. “The market here is dead. The workable level is $370-375/mt CFR maximum,” an importer from Indonesia said.