This week has been very silent in the Asian import billet market due to the long Chinese holiday. And even though there are strong expectations that Asian billet suppliers will try to pull up prices after the holiday due to high raw material prices and the expected restocking in China, this will unlikely to work out and be successfully achieved in many deals in Southeast Asia.
This week, offers have been reported mainly for ex-Iran materials, standing at $510-515/mt CFR in Indonesia and the Philippines, with counterbids at $505/mt CFR at the highest. “We saw China can give $505-510/mt CFR [this was fixed in a deal to Indonesia last week], so no need to be hurry and to buy Iranian [billets]. We just need to wait,” an importer from Jakarta said.
In the Philippines, offers have been rare and a few market sources believe they will still be at $515-520/mt CFR Manila after the holidays, but may increase to $520-525/mt CFR later in the week. “I feel that, with high raw material prices and because of the long holiday gap, China may make a slightly positive opening. But later weak demand may catch up,” a Singapore-based trader said. “Normally, after China’s holidays, there is a slight uptick in the market. But I'd estimate buyers will still prefer Russian/Iranian cargos over regional mills,” another trader said.
The main reason why prices cannot rise in Southeast Asia is the very limited demand for longs, which is not expected to improve until at least December. “Billet customers [in the Philippines] are suffering from low rebar demand and severely squeezed margins, and are not so ready to pay more for billets... Prices may move up next week, but within a very tight range only,” a Manila-based source said.
The SteelOrbis reference price has remained at $510-515/mt CFR this week.