Prices for import billet in Southeast Asia have increased over the past week, generally reflecting the situation in China. However, buyers have been inactive as they will need more time to adjust and they do not have an urgent need to buy.
Most offers for ex-China 5SP 150 mm billet have been starting from $505/mt CFR and up to $510-515/mt CFR for 130 mm billet, while before the holiday most offers were at $500-505/mt CFR and a sale was done at $498/mt CFR at the highest. “Deals are not seen yet, but I think this [$505/mt CFR] is the lowest price we will see in coming weeks,” a Manila-based source said.
Seeing still weak demand in Southeast Asia, some large Chinese billet exporters have not been eager to offer actively. “This week, no offers are given as the futures market saw a hike of up to $10-15/mt,” a Thai source said. He said that after the holiday he expects the tradable level will be $505/mt CFR and above. Late last week, one deal was rumored to have been done to Thailand at $495-498/mt CFR for Chinese 3SP. This was already an increase from the previous booking at $492-493/mt CFR. But still any level below $500/mt CFR is assessed as being too low for the current market conditions.
“People are waiting for more clarity in new prices, plus the local rebar market is not great,” a Southeast Asian buyer said. The SteelOrbis reference price for import billet in Southeast Asia has settled at $498-510/mt CFR, increasing by $5/mt since late April.
Chinese billets offer prices are stable at $480-490/mt FOB after the hike yesterday, May 6, but the general mood is still positive. “Sentiment is still positive, even though the pace of growth is slower… The paper market gained around RMB 80/mt in the last two days and the speed of sales in the physical steel market is good, so inventories are dropping and mills’ outputs are stable,” a Chinese trader noted, adding that after the rise he does not expect prices to roll back soon as Chinese steel products are still among the most competitive globally.
The Indonesian mill has increased its billet offer by $5/mt today, May 7, to $490/mt FOB for August shipment. It is out of the range of interest of any buyers due to the shipment period, though the price could be workable for some destinations like the Middle East, for instance.
