The downtrend has continued in Southeast Asia’s import billet market this week with Chinese offers, especially early in the week, declining again, being the most competitive in the market. Nevertheless, buyers have been reluctant to purchase in such a falling market.
Offers for ex-China 5SP billet to the Philippines have been reported at $500-505/mt CFR Manila, down from the asking price level of $510/mt CFR last week and a deal at $505/mt CFR. “Chinese offers are the most competitive so far, but no one wants to catch a falling knife,” a Manila-based source said. “The markets are very quiet now as the weakness in China may continue. Inventory pressure can push billet below $500/mt CFR,” a Singapore-based source said. Ex-ASEAN and some IF billet offers have been at $506-515/mt CFR Manila.
The prevailing offers for 3SP billet from China to Indonesia and Thailand are at $495/mt CFR, but no deals have been confirmed, with most bids at $490/mt CFR or below.
The expectations for the trend in the coming week or two are also not optimistic, though no further drops are expected while iron ore stays above $105/mt CFR. “Raw material prices are firm and iron ore may be the only reason to lift steel export prices and it hurts the margins of most mills,” a Chinese trader said.
The only competitive offer for billet in the import market in Southeast Asia apart from China has been from Russia. The main mill in Russia’s Far East region cut its offer by $5-7/mt to $490/mt CFR Taiwan in the middle of this week. Buyers have also followed and cut bids to $480-485/mt CFR.
The SteelOrbis reference price for imported billet in Southeast Asia has been corrected down by $9/mt over the past week to $495-500/mt CFR, while ex-Russia offers are not included in the reference price, just like other sanctioned sources.