Some ASEAN mills have cut billet offers to Southeast Asia this week, which they have been holding stable earlier, as poor demand and the negative situation in China have been affecting sentiment. As the billet and scrap price trends are in opposite directions and as raw material prices are on the rise, a number of sellers have withdrawn offers.
Offers for imported EAF/BOF billet have been reported at $535-545/mt CFR Manila, but, even though the level is similar to last week, previously only traders were offering at this level, while this week some BOF mills have already cut offers to $540-545/mt CFR, from $550/mt CFR and above a week earlier. “Even earlier, they were inviting bids at $540-545/mt CFR, though the official offer was higher. Now they've cut the offers, which means a further downside is expected,” a trader said. Another source stated, “Prices are lower [in SE Asia] as China moves down further. There is an increasing number of offers from traders in short positions.”
“There are no more IF offers because scrap is high already,” a Manila-based source said. There have been reports from Thailand that IF-based mills have increased export prices to $520-525/mt FOB, which is fully out of buyers’ range of interest as even large BOF mills can provide $510/mt FOB.
Also, billet suppliers from Russia’s Far East region have withdrawn their offers or have given very high levels to show their unwillingness to sell. Their previous offers were at $530/mt CFR or above and at least one deal was done at a slightly lower level to Taiwan.
In Indonesia and Thailand, the most competitive offers are still from Iran. In particular, there has been information that one Indonesian importer has purchased ex-Iran billet at $510-515/mt CFR. Offers to Thailand from traders for ex-Iran billet for October shipment have been at $510-525/mt CFR with no new deals heard. A lot of 40,000 mt of billet for September delivery, redirected from another market, is still on offer to Thailand at $505/mt CFR.
Major Indonesian BOF-based producer Dexin Steel has cut offers in the local market by $10/mt this week to $540/mt CFR. Also, the producer offered at the same level to Taiwan, where buyers have cheaper ex-Iran offers at around $520/mt CFR.
The Chinese market has been weakening over the past week with no construction steel demand improvement seen yet. The tradable level for imported billet has slipped to $480-485/mt CFR at the highest, versus $490/mt CFR reported on Tuesday this week and versus $490-500/mt CFR last week.
The SteelOrbis reference price for imported billet in Southeast Asia (excluding ex-Iran) has settled at $530-540/mt CFR, stable from last week.