The tradable price levels for billets in Southeast Asia have gradually declined as the sentiment in the Chinese market has confirmed to worsen. Though ASEAN mills have still been resisting rapid decreases in FOB-based offers, low Chinese offers are still seen and buyers are waiting for a further decrease in the near future.
Rumors about a deal for ex-Сhina 5SP 150 mm billet at $531/mt CFR Philippines late last week have been circulating in the market, and, though the information could not be confirmed by the time of publication, market sources believe that this level is hardly workable now. Also, some market sources believe that, if true, this deal was for Davao, where freight is up to $5/mt more expensive than to Manila. “Buyers are seeking lower prices now. I think $525/mt CFR for 130 mm is the target,” a Manila-based source said.
Early this week, offers from traders for Chinese origin 5SP 150 mm billets have been at $530/mt CFR to the Philippines, while ex-ASEAN 130 mm billet has been available at $535/mt CFR since last week. There have been hardly any IF offers in the market, so market sources expect billet importers in Southeast Asia will keep focusing on Chinese and ex-ASEAN BF billets.
The negative mood in the market has been fueled by the continuing downtrend in China, where the export reference price has settled at $505/mt FOB for now. “Everyone is talking about the export tariff that could be imposed in China, but I don’t see that traders have stopped offering. Nothing is clear,” a Chinese source said. One source at a mill also said that there has been no official statement, only “checks”. “The steel market is obviously softening today, especially with the negative signals now coming out of China,” a re-roller from Southeast Asia said.
At the same time, so far, ASEAN mills have been resisting rapid drops in prices, with the latest offer from Indonesia at $515/mt FOB, down from $520/mt FOB heard early in the week, but in line with previous deals.
The SteelOrbis reference price for imported billet in Southeast Asia has settled at $525-530/mt CFR, down by $7.5/mt on average over the past week.