Though ASEAN mills and some other billet exporters have been trying to keep offers stable or have been ready to give only limited discounts in the Southeast Asian market, the sharp fall in China has been impacting sentiments significantly. The official offers from China are the most competitive in Southeast Asia, but trade has fallen to almost zero.
The reference price for ex-China 3SP billet price stands at $480-490/mt FOB, down by $7.5/mt from yesterday and down $15/mt over the past week. The offers are on the higher end of the range, while the lower end represents the bids and short selling offers from traders. “The whole market is sliding down and mills are reluctant to finalize sales prices in a market like this,” a major Chinese trader said, commenting on the prices.
Lower ex-China FOB prices have already been seen in Southeast Asia. In particular, an offer for ex-China 3SP billet has emerged at $510/mt CFR Indonesia today, down by $8-10/mt from that seen on Tuesday and Wednesday. At the same time, offers for 5SP 150 mm billets to the Philippines are at $520-525/mt CFR, versus deals rumored in the previous week at $528-531/mt CFR. “I don’t believe that deals were actually done. Buyers will not pay such price when the market is bad, and there is no [big] need in 150 mm [billet],” a trader said.
At the same time, offers from the ASEAN region have remained relatively high. The ex-Indonesia 130 mm 5SP billet price level to the Philippines has been reported at $530/mt CFR. “The official offer [from Dexin Steel] is at $515/mt FOB, but they will likely be able to transact at $510/mt FOB [freight to Southeast Asia is $20/mt], if there are any firm bids. But, with the market dropping every day, buyers will want even more discounts to commit now,” another major Asian trader said.
Ex-ASEAN IF billet offers emerged at $520/mt CFR early this week, but no confirmed deals have been reported so far.
The SteelOrbis reference price for imported billet in Southeast Asia has been lowered to $510-530/mt CFR, as it includes both 3SP and 5SP prices.
In Taiwan, the latest ex-China 3SP billet offer has been heard at $507/mt CFR, a drop from the previous contract signed with the major Far East Russian seller at $515-518/mt CFR. “If someone in Taiwan bids at $500/mt CFR to the Russians, they will need to take it. They need to drop prices surely to collect orders,” a Singapore-based trader said.
The average local billet price in China has been at RMB 3,450/mt ($486/mt) ex-warehouse, losing RMB 25/mt ($3.5/mt) from yesterday and down RMB 100/mt ($14/mt) over the past week.