The recent bookings for import billet in Southeast Asia have been confirmed at the previous low level or even with a slight further decline, even though most major suppliers from China and the ASEAN region have been hiking their offers. The wider gap between offers and bids is likely to put pressure on trading activity in the near future.
A deal for 20,000 mt of ex-Saudi Arabia billet has been done to the leading buyer in the Philippines at $512/mt CFR, which is in line with last week’s reference price of $510-515/mt CFR. Though earlier this week there was information about this booking done at $515/mt CFR, a number of market sources reject this and have confirmed that there was some discount during negotiations. No other bookings have been reported to the Philippines. “Even at $512/mt CFR, the one who bought this is taking a risk. The local debar price is at breakeven with an input price of billet like this. If billet prices drop further, this $512/mt booking will result in money lost for the buyer,” a Manila-based source said.
But most ex-China and ex-ASEAN offers from traders have moved up to $520-525/mt CFR at the lowest and some mills have been asking for $530-540/mt CFR, which has been assessed by market sources as unrealistic. “I don’t see such low offers [as a Saudi Arabia sale]. I think buyers will still target not above $515/mt CFR, but all offers are higher,” a trader said.
The SteelOrbis reference price for import billet in Southeast Asia has been settled at $510-520/mt CFR this week, slightly up by $2.5/mt on average mainly because of higher offers from Asian suppliers.
In addition, following sales of ex-Iran billet at $455-462/mt FOB, customers in Thailand and Indonesia have been more active in negotiations, trying to get $500-505/mt CFR, while previous offers were hardly below $515/mt CFR last week. But no deal to end-users has been reported so far.