Prices for imported billet in Southeast Asia have fallen again by Thursday, March 23, the second time this week, and buyers have been reluctant to purchase in the falling market, expecting that prices may keep going down.
New offers for 5SP billet, mainly from Chinese traders for position cargoes of ex-Indonesia and ex-China origins, have been reported to the Philippines at $615-620/mt CFR, while the previous bookings for IF billets were at $625-630/mt CFR and for ex-Vietnam EAF they were at $635/mt CFR Manila. This week, only one deal for a position cargo of 10,000 mt of 5SP Indonesian material was done at $620/mt CFR in the first half of the week. But by Thursday, demand has almost come to a halt. “Buying action is completely halted as demand is really poor in the end-user segment… Buyers are all very fearful of more price drops,” an international trader said.
“As customers understand that they can easily get $615/mt CFR [from traders for 5SP], they have lowered their price ideas to $610/mt CFR,” a market source said.
The SteelOrbis reference price for imported billet in Southeast Asia has been settled at $615/mt CFR by the end of this week, down by $5-10/mt from the level reported on Tuesday, March 21, and down $20/mt from last week.
The main reason for the recent rather sharp fall was the downtrend seen in China. The latest offers for ex-China billet have been officially at $590-600/mt FOB, while even lower levels could be found. As of Thursday, March 23, rebar futures at Shanghai Futures Exchange are standing at RMB 4,070/mt ($592/mt), losing RMB 135/mt ($19.6/mt) or 3.2 percent since March 16.
The market activity in Indonesia and Thailand has been even slower. Dexin has been offering in the local market at $625/mt CFR, while lower offers for Chinese billet have been available in Indonesia at $615-616/mt CFR, with no demand seen. Offers for ex-Iran billet have been rare and at $595-600/mt CFR, versus $600/mt CFR and above in the previous week, but no deals have been reported to Southeast Asia as buyers have declined to bid at these levels. “I believe that buyers are waiting for a clearer direction due to the issue affecting financial institutions worldwide and the futures market in China dropping again,” a source in Bangkok said.