Prices for billet in Southeast Asia, especially from the major regional ASEAN mills, have increased starting from the beginning of this week, though most customers are sceptical that they will be fixed in deals, given the slackness of consumption. Moreover, there are still low offers for IF billets from Thailand and ex-Iran offers from traders, and so buyers still have cheaper options and believe that the recent increase will be short-lived, SteelOrbis has learned from the market on August 4.
Traders and some mills have been offering ex-ASEAN EAF/BOF to the Philippines at $540-550/mt CFR minimum, with the lower end of the range corresponding to 3SP billets only. This level is at least $5-10/mt above the general offers available last week, while some traders considered even $510/mt CFR as possible at the time. For now, short position offers from traders have almost disappeared in the Philippines. “We don’t see them at the moment. The market is not falling. Some would want to ride the rise in the tide,” a trader from Manila said.
Moreover, Indonesia major producer Dexin Steel has started to voice offers at $525/mt FOB at the lowest, after already increasing them to $520/mt FOB late last week. The new level translates to $555/mt CFR at the lowest to the Philippines. While in the local market in Indonesia, where prices from Dexin were at $530/mt CFR and lower in the middle of last week, they have increased to $550/mt CFR Jakarta, sources have said. “Even higher offers are there. The increase is obvious, but prices are not sellable,” a buying source from Indonesia said.
Offers from Malaysian mills have also been reported at $520-525/mt FOB after one sale done for a 20,000 mt cargo, consisting of 3SP and 5SP billet, at $485-490/mt FOB last week.
At the same time, most market sources in Southeast Asia believe that the uptrend in the billet market will not be sustained and that this is a short pause before prices continue to fall. “This increase is speculative and there's a tendency to go down because of low demand,” a trader from the Philippines said. A re-roller from the same country is also pessimistic, stating, “Everything is in slow motion. Everybody is losing money. The global and local demand is very soft.”
The still low offers available for ex-Thailand IF suppliers are proof of the weak fundamentals. On Thursday, an offer for 3SP IF billet was reported at $510/mt CFR Manila, while earlier this week there were reports that suppliers wanted to increase prices to $520/mt CFR.
Also, offers for ex-Iran billet have been reported at $520/mt CFR to Indonesia and Thailand, stable from last week, while even some $5/mt discounts are possible, according to sources in Indonesia. Bids are still lower, and so no new deals to Southeast Asia have been reported so far.
However, there has been information about an ex-Iran billet cargo of 30,000 mt of billet sold to China at $505/mt CFR this week, though this was not confirmed by the time of publication. “Today China’s market is down again, so it's hard to push for any increase [in SE Asia],” an international trader said. As SteelOrbis reported earlier, the reference price for imported billet in China has increased to $500-510/mt CFR this week, while most offers were at $520/mt CFR.
The SteelOrbis reference price for imported billet in SE Asia has settled at $530-540/mt CFR, up by $17.5/mt over the past week mainly due to excessively sharp fall last week in some deals.