Import billet prices in China still rising gradually, SE Asian market quiet

Thursday, 05 November 2020 17:46:06 (GMT+3)   |   Istanbul
       

Prices for imported billet have continued to go up very gradually in China owing to higher domestic billet prices in the country, while the overall outlook for the near future is optimistic. But the Southeast Asian market has been on pause and prices have remained stable as demand from the Philippines has been impacted by typhoons and other customers have continued to bid at much lower levels than current offers.

China still focuses on buying from Southeast Asia

According to sources, the latest deal for ex-Indonesia billet to China has been done at $457/mt CFR, up by $3/mt compared to the previous contract from the same source. Subsequently, no new offers from this supplier have been heard in the Chinese market as the company seems to be sold out for now.

Also, there has been information about another 20,000 mt of ex-Vietnam BF billet sold to China at $455/mt CFR. However, this information could not be confirmed by the time of publication. Offers from Vietnam have been heard at $450/mt FOB, equivalent to $460/mt CFR China. “Hoa Phat sold out its December allocation some time ago,” a trader said. Another source added that, though the exporter is officially offering at $450/mt FOB, “they may still consider $445/mt for January.”

Some gradual increase in import billet prices in China has been triggered by higher futures prices and local billet prices. The price level of billet in Tangshan has reached RMB 3,500/mt ($508/mt) ex-works on November 5, up by another RMB 50/mt ($7.5/mt) since late last week. As of Thursday, November 5, rebar futures at Shanghai Future Exchange are standing at RMB 3,748/mt ($560.3/mt), increasing by RMB 80/mt ($12/mt) or 2.2 percent since October 29.

However, the recent price increase in the local market in China is still not enough for the majority of billet exporters outside the ASEAN region. For instance, bids for Indian and Russian billet still do not exceed $445/mt CFR.

Southeast Asian market silent, Philippines hit by typhoons

There have been no new deals for imported billet reported in the Philippines over the past week. One Russian supplier has been offering at $452/mt CFR to the country, while some other offers from different sources have been at $455-460/mt CFR Manila. Most sources believe that the highest possible price that suppliers can get in the Philippines is around $455/mt CFR at the moment.

“The market is very silent, no response from customers,” a trader said. The Philippines was hit by the strongest typhoon this year, Goni, at the weekend. “The super typhoon with 200 km/hr winds was about to hit Metro Manila last weekend, but hit a cold front and weakened. So Manila was saved from it. But some outlying provinces suffered major damage,” a local re-roller said. Moreover, the tropical storm Siony is expected to make landfall in the Philippines on Thursday-Friday.

In Thailand, one of the main trading houses has sold 20,000 mt of Indian billet at $442/mt CFR Thailand for December shipment but, according to a number of sources, the contract was concluded a week or 10 days ago. “Customers in Thailand want to buy billet at $445/mt CFR, but there is no offer at this price level,” a local trader said. The bid price level for Iranian billet is at $440-445/mt CFR, but no new deals are reported so far.

The SteelOrbis reference price for imported billet in Southeast Asia has been set at $455/mt CFR, up marginally by $2.5/mt from last week.


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