Market situation for billets in Asia

As the rainy season commences, market has got into a weakening trend in the last couple of weeks for long products in Vietnam. Inevitably, construction activities slow down, eventually causing a drop of the consumption level of long products. The average consumption rate is expected around 200,000 mts per month for this season. Although the market acceptance was at lower levels, offers of billets ex-China into Vietnam have not changed over the last week and remained in the $425-430/mt price range on CFR basis. Indian billets are not preferred by some mills due to their hardness compared with Russian origin. It is also reported that Thai buyers are also looking positive to possible billet offers at $425-430/mt CFR range, however, not many offers are heard to have been made so far. Since end of May, Philippines market is slow in terms of billet and longs demand. It is heard that there is no way to get approval from buyers for offers at around $430/mt CFR and are persisting on their low $400/mt CFR buy ideas. It seems currently not possible to find suppliers to accept to lower offers to that extent. We understand that certain major buyers are more flexible with regard to accepting numbers at around $415-420/mt in order to maintain their stock levels. Buyers in the Taiwanese market also are not acting eager to respond to offers made as the inventory levels are quite high and demand is lately weak as it is the time for seasonal slowdown for construction steel in this market. If we look at the offer levels we do not see much change over the last week with Russian origin offers at $430/mt and Chinese origin at $420/mt on CFR basis. However, there is no activity at these levels as buyers counter-bid only at around low $400/mt, due to the reasons mentioned above.