A number of deals for position cargoes originally planned for China have been reported as having been done to Southeast Asia. Customers have obtained prices below $700/mt CFR and have decided to buy.
In the Philippines, one of the most active markets in Southeast Asia, the trading activity has not been very lively and only one small-volume deal for 10,000 mt of ex-Vietnam IF 3SP billet has been reported at $680/mt CFR. “This is a redirected cargo from China. The IF material is not very popular, but the price is good,” a source said. Some other IF billet suppliers have received bids from the Philippines at $675/mt CFR, but no further deals have been confirmed for now.
The tradable level for BOF/EAF billet in the Philippines has been heard at $685-690/mt CFR, down from $700-710/mt CFR seen last week before the collapse in China. But “it is hard to find offers [for 120-130 mm billet] at these prices,” a trader said.
Since most buyers from China prefer 150 mm billet, which is used by only one mill in the Philippines, traders have been focusing on offers to other Southeast Asian countries like Indonesia and Thailand. For instance, one Indonesian long steel producer has confirmed a purchase of 20,000 mt of ex-Vietnam 150 mm 5SP billet at $690/mt CFR. Today, offers for ex-Indonesia BOF billet have also been reported at $690/mt CFR to both Indonesia and Thailand.
For mills, the current price levels are too low and they are offering at $695-700/mt CFR Southeast Asia minimum with the highest prices at $710-715/mt CFR. According to sources, one Vietnamese billet producer has sold a cargo in the local market at around $690/mt ex-works, and so the current conditions in the export market are not very attractive.
In Thailand, a deal for 10,000 mt of prompt shipment billet redirected from China has been reported at $690/mt CFR. In addition, “this week rumours said that a fixture was at close to $680/mt CFR,” a source from Bangkok said. Some other local traders confirmed that most bids are heard at $675-680/mt CFR at the moment.
In China, the situation in the import billet market has not improved even after some slight increase in futures prices today. Local billet prices in Tangshan have slipped by RMB 30/mt ($5/mt) from last Friday to RMB 4,960/mt ($776/mt) ex-works or $687/mt, excluding 13 percent VAT. A source from China said that the current local market allows import billet to be purchased at only $660/mt CFR at the highest, and so most negotiations have switched to Southeast Asia.