Early this week rumours of discounted billet sales from the ASEAN region from a trader’s position emerged in the Southeast Asian market, as SteelOrbis learned from the market.
In particular, there has been information about 40,000 mt of ex-Indonesia billet sold to the Philippines at $530/mt CFR for 3SP and $5-10/mt higher for 5SP, while a week before the reference price was $540/mt CFR. A few major traders said that this cargo was previously purchased from the mill for the European market, but then was diverted back to Southeast Asia. “A lot of traders are holding on to their positions and can't unload unless they slash the price,” a source in Manila said. But this deal has not been confirmed by the time of publication. “Some were offered this prompt shipment cargo last week, but the volume was too big for the non-Steel Asia companies to take even if they pooled in together,” another trading source from the Philippines commented. The largest importer in the country denied that the cargo was purchased.
In any case, lower-priced position offers from traders in the Philippines have been signalling the weakness of the market. Though market sources believe that such trades, taking into account that mills’ October shipment sales were at hardly below $510/mt FOB, can gain very little profit if any at the current CFR price levels.
Mills from the ASEAN region, offering for November shipment, have kept their official prices stable at $525/mt FOB, but in negotiations they can cut them to $515/mt FOB, according to sources. Even after discounts, this price corresponds to $540/mt CFR Manila at the lowest, too high for most buyers, who can accept around $530-535/mt CFR at present.
The SteelOrbis reference price for imported billet in Southeast Asia has declined to $530-540/mt CFR, versus $540/mt CFR last week.