The price levels in recent deals and offers have increased over the past week in Southeast Asia’s import billet market, supported by strong raw material prices and a lack of cheap offers. Customers from the Philippines have been worrying about the possible imposition of a billet export tax in Russia, which is one of the largest sources of imported billet for them.
The latest booking for ex-Russia billet has been reported to the Philippines at $600/mt CFR Manila, according to traders. But most sources said it was done before the New Year holidays and that offers from the main non-Asian suppliers are at $610/mt CFR to the Philippines minimum at the moment. Russian suppliers are out of the market due to the holidays until next week. “Asia is stuck at $600/mt CFR. But the Philippines has to pay a premium, because elsewhere the FOB level is $600/mt FOB,” a local trader told SteelOrbis, adding that some offers for Southeast Asian billet are still available at $600/mt CFR, but supply has become tighter.
“Some buyers in Manila seem to be worried by the export duty [which was recommended in Russia at the level of 13 percent, but not less than $73/mt in late December]. Especially those who booked billet for February-March shipment,” another source said. Though most sources believe that the largest Russian exporters will “honour the commitments” and that contract cancelations are very unlikely, the possible imposition of duty for six months may lead to higher prices from one of the main exporters of billet and lower earnings for producers.
On Monday, January 4, one of major Indian state-run steel producers closed its tender for 30,000 mt of 150 mm billet at about $575/mt FOB or slightly above, according to market sources. Taking into account the freight rate to Asia at not lower than $25/mt, this price level translates to around $600/mt on CFR basis. There is information that the producer has come out with another spot tender on Tuesday.
The SteelOrbis reference price for imported billet in Southeast Asia has remained at $600-610/mt CFR, the level seen in the last days of December, but which is $5-10/mt higher than on December 24.