This week offers for ex-China billets, the most popular recently in Southeast Asia, have increased, following gains in coke and coking coal futures early this week, somewhat better demand, but also firm supply. So, most customers have been looking for cheaper alternatives, not believing in the sustainability of this upward trend.
Most offers for 5SP billet from China to the Philippines have been at $460-465/mt CFR this week, versus $452-455/mt CFR seen late last week. “Yesterday, 5SP was offered in Manila at $460/mt CFR… but I sense it may be up again on back of the rate cut,” a Singapore-based trader said. The US Federal Reserve has announced an interest rate cut, while it has also hinted that borrowing costs will continue to be reduced this year. This move will positively affect transaction activities in the ferrous metals market.
“I think a few customers [in SE Asia, not only in the Philippines] agree to accept $450/mt CFR, but for 5SP [150 mm] billet the workable prices are not very far from this - at around $450-455/mt CFR,” an Asian trader said. No new deals have been reported to the Philippines after an ex-Russia sale at $432/mt FOB Far East Russia, equivalent to $452-455/mt CFR.
However, there has been a rumor that some Indonesian buyers purchased ex-Iran billet at $450/mt CFR. Even though this price is among the most competitive in the market lately, not many buyers consider this workable, especially for Iranian origin. “It's the price level Thai buyers consider paying for billet from China, but they don't want to buy a full vessel of 30,000 mt. If Iran wants to sell such a large volume here, I believe buyers will ask for lower prices,” a Bangkok-based source said. A few other sources confirmed that bids for 3SP billet from a number of customers in Southeast Asia have remained at not above $445/mt CFR.
Ex-Indonesia billets have remained among the most expensive in the region. Official offers from the leading Indonesian mill were at $447/mt FOB today, down from $450/mt FOB reported last week and $1/mt below what was heard in the middle of this week. The level is higher compared to the ex-China offer level at $440/mt FOB on average.
The SteelOrbis reference price for import billet in Southeast Asia has settled at $455-460/mt CFR, up from $447-455/mt CFR last week.