SE Asian billet market stops falling as fewer stressed cargoes left, China up slightly

Tuesday, 23 November 2021 17:18:30 (GMT+3)   |   Istanbul

The situation in the Southeast Asian billet market has started to improve early this week. Mills have been reluctant to cut prices and have been insisting on the same or even higher prices, while there have been fewer stressed cargoes from traders left in the market. Moreover, billet prices in China have shown some slight rebound, which also supported sentiment.

The exporting mill based in Russia’s Far East region has been offering billet for January shipment at $670/mt CFR to the Philippines, while one of the Vietnamese sellers has also been ready to deal at this level. Last week, offers were mainly at $660/mt CFR from mills. This week, the level of $660/mt CFR has also been achievable after negotiations, sources have said. But sentiment has definitely changed as the price drop has stopped and mills have already started to prepare for some rebound. “There is still no interest at these prices, but the market is better,” a trader said.

Prices for stressed cargoes have remained the lowest in the market, but the rapid fall has also eased in this segment. The lowest level for an ex-Russia stressed cargo from a trader has been at $620/mt CFR to the Philippines, while an ex-Iran lot has been offered at $610/mt CFR Indonesia. This is after deals at $618-620/mt CFR for ex-India material signed last week. “Positions cargoes are getting fewer by the day,” a Singapore-based trader said.

Local billet prices from mills in Tangshan have improved by RMB 40/mt ($6/mt) today and are up RMB 60/mt ($9/mt) from last Friday, to RMB 4,260/mt ($666/mt) ex-works, which translates to $590/mt, excluding 13 percent VAT. The ex-warehouse prices in Tangshan have rebounded to RMB 4,310/mt ex-warehouse, or $597/mt without VAT.

There have been no reports about the resumption of negotiation for billet imports to China as the tradable levels are still mainly below $600/mt CFR ($570-600/mt CFR last week), but market sources all said that this is a positive movement.

“Prices have bottomed out and will probably rebound. Iron ore [futures] also rebounded today, by almost 9-10 percent,” an Asian trader said.

$1 = RMB 6.3929

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