Following recent price increases and a few deals for imported billet signed at a higher level in the Philippines, the billet market in Southeast Asia has stalled. Weak demand among major buyers in general and falling futures prices in China may prevent any further price increase in the region, sources have told SteelOrbis.
Offers to Southeast Asia limited, but demand not sustainable either
As SteelOrbis reported earlier this week, ex-Russia 100 mm rebar has been sold at $446/mt CFR Philippines. Also, a deal for Russian 125 mm has been reported at $445/mt done last week, but some sources said that it was not finalized as the seller “was not able to consolidate enough orders to fill one vessel,” one local source said.
Most offers for Russian, Vietnamese and Indian billet have been reported at $445-450/mt CFR and it is almost impossible to get any lower prices at the moment, according to buyers, as there are not many offers in the market at the moment. The lack of offers has supported prices, but weak demand has persisted. “The market is slow as many construction projects are not working in the Philippines, around 50 percent of them. There are still limitations of manpower and this will continue maybe up to November,” one local construction steel producer in the country said.
The latest ex-Iran billet sale to Southeast Asia has been reported at up to $435/mt CFR. “Thai customers can pay this price,” a trader said, but now offers are coming at not below $440/mt CFR Thailand.
The SteelOrbis reference price for imported billet has been increased by $5/mt compared to last week to $445-450/mt CFR.
China stops billet purchases as local prices fall
Domestic billet prices in China have edged up early this week, but have fallen visibly over the past two days, following sharp losses in the futures market. Domestic billet prices in Tangshan have lost RMB 60/mt ($9/mt) over just two days to RMB 3,420/mt ex-works.
On Thursday, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,640/mt ($533/mt), decreasing by RMB 150/mt ($22/mt) or 3.96 percent since September 3, while down 1.6 percent compared to the previous trading day.
Such moves, which have been partly triggered by the demand in China which has not been as high as expected, have made all major importers of billet in China very quiet and no new bids have been heard recently.
Offers from a Vietnam BOF mill and Indonesia are still at a high level - $455-465/mt CFR. The main supplier from Vietnam has time to wait as the main part of its allocation for November is sold out, while offers from Indonesia are still available for late October shipment.