Lower ex-ASEAN billet offers have started to emerge in the export market this week as mills have been looking for sales, seeing slack domestic demand and the need to push volumes.
One of the major Vietnamese mills has been offering 5SP 150 mm billet to Indonesia at $507/mt CFR and offers to the Philippines have been at $505-510/mt CFR. “This is, I would say, on the lower side. They really need to sell,” an Asian trader said.
The same Vietnamese mill has been offering billets to Turkey and Europe at $525-530/mt CFR, while offers from Indonesia and Malaysia to these destinations have been at $530-535/mt CFR.
Though officially most ASEAN-based suppliers are not voicing offers below $500/mt FOB, in firm negotiations the level of $490/mt FOB could be achievable, sources have said.
“Vietnam was the rapidly developing market, which should be among the last to cut production, but what we see is that some mills there are the first to do so,” a trader said, referring to the recent announcement of Hoa Phat of the stoppage of four of its blast furnaces due to weak demand.
The most possible sales destination for ex-ASEAN billet exports are still the regional Southeast Asian market and Latin America, though in both of these outlets the needs are much lower than earlier. Market sources believe that customers from Latin America will be in the market with new inquiries from this week. If a month ago deals for ex-Far East billet were done at $620/mt CFR, the new levels are expected at $580-590/mt CFR or so.
