SE Asian billet buyers shun higher offer prices

Posted on 24 February 2020

Source: Kallanish

Market participants in Southeast Asia's billet import market expect that the market will firm amid the recent uptrend in scrap prices. However, buyers are resisting paying more because of market uncertainties, Kallanish notes. Suppliers are also seen to be less aggressive in the region as the market is seeing very limited offers.

In Manila, some offers for Far East Russian billet are prevailing at $420-425/tonne cfr and for Black Sea billet, $440/t cfr, importing sources say. These offers are for end-March/April shipments. “I think prices might firm up,” a buyer says. However, some traders say that Russian offers for April shipments have mostly dried up now. Offers for May shipments are not out yet, they add.

Over the week, several suppliers were offering 120mm square by 6m length billet from Japan. "These would be cheaper than $420/t cfr," a Manila trader says. During the week of 10 February, some buying took place for 3-4 metre-length Japanese billet at around $410-412/t cfr Manila. The trader said that Philippine buyers were still reluctant to pay $420/t for the usual 12m length billet. Earlier in the week of 17 February, induction furnace billet from Vietnam was booked at $412/t cfr Manila. Buyers only want to pay this level, another regional trader concurs. Induction billet is typically priced at a discount to EAF/blast furnace billet. Two weeks ago, a low-priced order for prompt shipment Black Sea cargo took place at $415/t cfr.

Certain traders and a buyer heard Chinese 150mm Q275 grade billet offered at $415/t cfr Thailand, $415/t cfr Indonesia and at $418/t cfr Philippines. Some others say that this was too low. A Chinese mill is giving a fresh offer on Friday at $430/t cif Thailand, a Bangkok trader says. The lower priced offers are probably from traders who are shorting the market, he adds. Iranian billet is now offered at $415/t cfr Thailand, up from the previous week's $410/t cfr.

On Friday, Kallanish lowered its 5sp/ps or Q275 120/125/130mm square billet assessment slightly to $420/t cfr Manila, down $2.5 on week. 

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