ASEAN-based mills have hiked billet export prices once again this week, supported by previous higher-priced deals to traders. But most market sources believe that the latest increase is not based on the real market situation and the new offers are not accepted by most customers in Southeast Asia. Only one ex-Iran billet deal has been done at a higher level over the past week, SteelOrbis has learned.
The SteelOrbis reference price for imported billet in Southeast Asia has increased further, by $10/mt over the week to $535-550/mt CFR, where the lower end corresponds to the tradable EAF/BOF 3SP billet, while the higher end is for 5SP grade material. While last week the hike by $15/mt in prices was fully confirmed in a number of deals to the Philippines, this week the trading activity has sunk to almost zero. The current reference prices are reflecting the tradable levels in the Philippines for EAF/BOF billets, while offers from the major suppliers have been much higher and are “unrealistically high,” an international trader commented.
The major Indonesia and Malaysian mills have been offering billet at $545-550/mt FOB or even up to $555/mt FOB this week, up from $535-540/mt FOB reported last week. As a result, most offers for ex-ASEAN 5SP billet have been coming to the Philippines at $568-580/mt CFR this week. But most deals done last week were just at $525-535/mt CFR and the highest rumored deal was heard at $545/mt CFR.
So, the regional buyers and trader are assessing the current mills’ offers as too high, at least for the current conditions. One of the reasons for such high target prices some sources said were higher-priced deals to traders heard at $525-535/mt FOB. “There must be a reason why mills increased prices to $550/mt FOB. Perhaps they indeed booked at $535/mt FOB already before increasing prices,” a trader said. But if true, this material booked by traders would not necessarily go to Southeast Asia and the traders may target more distant market like the MENA region, market sources believe.
“I suspect things will start slowing ahead of Christmas,” another trader commented regarding the expected termination of the rapid price rises seen lately.
While BOF prices have surged, some small volumes of ex-Vietnam IF 3SP billets have been traded at $520/mt CFR to the Philippines in past weeks. Some new offers have been heard at $525-530/mt CFR. “But in general, the 3SP billet market is still showing opposition,” a Manila-based source said.
“I suspect things will start slowing ahead of Christmas,” another trader commented regarding the expected termination of the rapid price rises seen lately.
In Thailand and Indonesia, billet import trading has also been limited. Only one deal for up to 20,000 mt of 200 mm blooms from Iran has been reported at $510/mt CFR to Indonesia. Traders have been trying to generate bids at the same level in Thailand, but have failed so far. The previous ex-Iran deal to Indonesia was at $493/mt CFR.