Prices in Southeast Asia have posted significant rises this week, which has this time been supported not only by aggressive suppliers’ moves based on more expansive raw materials, but also by the resumption of restocking, in the Philippines in particular, SteelOrbis has learned from the market on December 8.
Starting from late last week, buying activity in the billet market in the Philippines has increased with deals for 5SP billet done at $525-530/mt CFR, while some volumes were also sold at $520-525/mt CFR. But in the first half of this week, a number of deals have already been done at $525-530/mt CFR, as confirmed by a number of market sources. One deal at a higher level has also been rumored to a major buyer at $535/mt CFR, but the mill has not commented. In total, not less than 50,000 mt of imported billets have been purchased, most of them from Indonesia, Vietnam and Malaysia. Also, there have been rumors that the last deal to the largest importer in the Philippines has been closed at as high as $545/mt CFR for 5SP, but there has been no confirmation by the time of publication. “If the Philippines buy at $545-550/mt CFR, the price will not fly except for SteelAsia, which needs to run whatever the price is,” a trader in Manila said.
Though a number of local sources from the Philippines said that $535-545/mt CFR is already too high, and new offers at $550/mt CFR or so cannot be considered as acceptable, the improvement in demand and higher deal prices are confirmed by all market participants. “Dexin has sold out for January now. So indeed, people are buying… I feel that billet prices are too low to be honest, considering high scrap and ore pricing. Mills were all losing money,” a Singapore-based trader said.
As result, the SteelOrbis reference price for imported billet in Southeast Asia has increased to $525-540/mt CFR, up by $15/mt over the past week, based on deals done this week and the lowest possible offers for now.
Ex-ASEAN mills’ offers have increased to even higher levels that those reported earlier this week - to $525-530/mt FOB from Indonesia and Malaysia. But in reality, market sources believe that it is possible to get $510-520/mt FOB (lower end of the range for 3SP and higher for 5SP) depending on the mills’ allocations. Some producers who closed order books for January shipment will try to increase to $525/mt FOB and not lower.
In Thailand and Indonesia, import billet offers have also increased. Traders have been offering ex-Iran billet at $510-520/mt CFR to Thailand, with the lowest possible level in negotiations heard at $505/mt CFR. This is versus deals for ex-Iran billet at $485-493/mt CFR to Thailand and Indonesia reported last week. Buyers from these countries have not been ready to accept higher prices at the moment.