Billet prices in Asia have kept falling, driven by the bearish Chinese market as the most competitive offers now in the import market are from Chinese traders. Trading in Southeast Asia has been slow due to the summer lull and buyers are waiting for some possible further declines.
Chinese export offers have lost another $5/mt today, coming to $455-465/mt FOB, while a few market sources said that most negotiations can be held at the lower end of the range and that traders are expecting prices to fall to $450/mt FOB soon. “Pessimism has escalated and the market has fallen sharply again. Even though steel output had touched the bottom of the last three months, slow demand is still hitting prices... Today, the local currency appreciated significantly against the dollar, which adds more uncertainty to the export situation compared to a stable movement,” a Chinese trader said.
In this situation, general offers, including those for short positions from traders in Southeast Asia, have declined week on week. Officially ex-China 5SP billets were offered to the Philippines at $490/mt CFR in the first half of the week, but the tradable level is not above $485/mt CFR. One deal done at $490-495/mt CFR last week has been in re-negotiation this week at $485/mt CFR, according to market sources. Last week, most offers were not below $495/mt CFR Manila.
Moreover, in Indonesia and Thailand even lower levels have been voiced today, July 25. In particular, offers for 3SP billet have been at $470/mt CFR and at $480/mt CFR for 5SP billet, to Bangkok for end-of-September shipment. Similar offers for 5SP have also been confirmed to a few Indonesian buyers at $480/mt CFR, which translates to around $460-462/mt on FOB basis.
The SteelOrbis reference price for 3SP and 5SP billet in Southeast Asia has settled at $470-485/mt CFR, down by $15/mt on average from $490-495/mt CFR last week.
At the same time, billet suppliers in the ASEAN region have taken a pause and are trying to keep prices stable, at least for now. The ex-Indonesia billet price is still assessed at $465-475/mt FOB, where the higher end represents official offers, while the lower end represents the real level in negotiations. No new deals have been reported so far. Ex-Malaysia offers are on the higher side, at $480/mt FOB.
