The Southeast Asian market has collapsed early this week with traders becoming more and more aggressive, seeing the sharp price drop in China and no demand improvement. The market has been in panic mode as most market sources believe the bottom has not been reached so far.
The SteelOrbis reference price for imported billet in Southeast Asia has lost $20/mt since last week, coming to $530-550/mt CFR. The higher end of the range corresponds to offers for long positions mainly from traders, to offers from Chinese producers and to the deal signed last week. In particular, a 10,000 mt contract for ex-Vietnam IF 5SP 130 mm billet was done to the Philippines at $550/mt CFR late last week, a number of market sources confirmed. This is down from the reference levels of $550-570/mt CFR last week.
However, early this week, prices have collapsed further. The same Vietnamese mill’s offers have been heard at $530-535/mt CFR Manila, with no feedback from customers. In addition, a number of offers for open origin 5SP billet (BF/EAF/IF) for July shipment have been from traders at $535-540/mt CFR Manila this week and some sources have reported even a few short position sales at $530/mt CFR to the Philippines, though no details have been heard of by the time of publication. “But counterbids are at $500/mt CFR Manila… When the market drops so fast, almost everybody in the steel value chain is losing heavily. Billets prices have dropped by $80-$100/mt in five weeks. Confidence has been shattered. Panic has set in. Prices are still dropping. Strictly seppuku time!” a Manila-based re-roller said.
Moreover, even lower-priced offers for ex-China 3SP BF billet in short positions have been reported in Taiwan at $525/mt CFR for July shipment. “The market is falling like crazy. Last week, China was ready for $540/mt CFR at the lowest,” a source from Taiwan commented.
As for billet from Russia’s Far East region, the latest offers have been reported at $535/mt CFR, with the possibility to go to $530/mt CFR. No fresh deals have been reported so far.
No firm offers have been heard for ex-Iran billet, with only some traders “fishing at $540/mt CFR,” a trader said.
