After some pause in purchases, a new deal for imported billet has been done in Southeast Asia at a higher price level. As a result, the deal has brought the market price level to $420/mt CFR and slightly above. Suppliers will try to get even higher prices in new sales to Asia, but this will depend on further demand from China, which has showed some slowdown recently.
A contract for 40,000 mt of ex-India billet has been signed in the Philippines at $430/mt CFR Davao, according to a number of sources. This price level has been assessed in the market as being very high, partly due to the much higher freight to Davao than to Manila. Sources in the Philippines said that this contract price level translates to $420-422/mt CFR Manila. According to sources from India, the sale corresponds to $398/mt on FOB basis.
Previously, the workable level (on CFR Manila basis) was assessed at $410-415/mt CFR as most customers were taking a wait-and-see position. But after the latest deals to China and other destinations, major suppliers have become more aggressive and have been not giving offers below $420/mt CFR, which is one of the reasons for higher deal prices in the Philippines.
Offers from India to China were heard at $422-425/mt CFR late last week, while ex-Vietnam BF billets have been offered at $430-432/mt CFR China. No new deals have been reported in the market recently. Futures prices have posted sharp declines over the past two days due to the escalation of tensions between China and the US and so buyers’ sentiments have been cautious. Rebar futures at Shanghai Futures Exchange have lost RMB 83/mt ($11.2/mt) since last Thursday.
