The situation in the import billet market in Southeast Asia has worsened further this week due to the continued impact of Covid-19 restrictions on long steel demand and the sharp declines in billet prices in China. Though a number of suppliers have not been ready to provide very low prices, preferring to watch the situation, the decline in prices is inevitable and they will approach $650/mt CFR, sources believe.
Official offers of 5SP billet to the Philippines from major suppliers have been at $690-700/mt CFR this week, but almost all sources believe that “all will easily come down to $680-685/mt CFR levels against a bid. Probably even lower, depending on how desperate they are,” an international trader said. But there have been almost zero firm bids from the Philippines over the week. Some buyers have been evaluating the real market price at $660/mt CFR for October shipment, but without any serious bidding, SteelOrbis has learned.
“It seems that the lockdown in the Philippines may be extended beyond August 22 as cases are still increasing over there,” a trader said. This is putting big pressure on re-rollers. “Those mills using 3SP are in a terrible position. They need very cheap material to survive, based on domestic rebar and angle bar prices. For the 5SP users, they still have a market though it is slow in terms of demand,” another source said.
No fresh offers for IF billet have been reported lately after $670-680/mt CFRR last week, but sources expect the new level should be below $660/mt CFR Manila.
“Sentiments have turned sharply negative after China’s drop,” a source said. Following a deal for ex-Vietnam billet at $690/mt CFR on Monday, another deal for ex-Indonesia billet was heard at $680/mt CFR on Tuesday. But in any case, after todays’ drop in the local market in China, these prices are far from the real market level for now. Local billet prices in Tangshan have lost RMB 100/mt ($15/mt) today, coming to RMB 4,880/mt ($752/mt) ex-works, which translates to $666/mt if excluding 13 percent VAT. “I think China will ask for $650/mt CFR now,” a trader commented.
Prevailing offers for ex-Iran billet from traders are at $680-685/mt CFR for Thailand for September-October shipment, but no deals have been heard.
The SteelOrbis reference price for imported billet (excluding IF) in Southeast Asia has dropped by $20-30/mt over the past week to $660-670/mt CFR.
$1 = RMB 6.4853