Posted on 25 Jan 2021
The Southeast Asian billet market weakened further last week, with prices edging below $600/tonne cfr, Kallanish notes. However, buyers are not keen to engage in the falling market.
Offers in the Philippines have fallen to $595/t cfr Manila. These include an offer for 45,000 tonnes of 130mm 5sp Russian Black Sea billet for March shipment, and for 6-10,000t of 130mm 5sp EAF billet from Vietnam for February shipment. Most offers were previously prevailing at above $600/t cfr.
A Manila trader says his buyers are showing "…zero" interest in current offers. Buyers are definitely not keen to book at $595/t cfr, another says. He foresees prices falling to $550/t cfr by the Chinese New Year or sooner. This is based on the assumption that scrap prices, which are coming off quickly, will reach $420/t.
In Thailand, many traders are inviting buyers to place bids at $590/t cif Ko Sichang, after which they will reconfirm billet supply. These are heard to include blast furnace billet from Vietnam and Indonesia. But nothing has materialised so far because Thai buyers think that this is only the start of price corrections, a Bangkok trader says. "Moreover, rebar stockists are only buying on a hand-to-mouth basis and destocking material," he adds.
Russian billet is offered at $600/t cfr Thailand, Vietnamese at $585/t cfr and Indonesian material at $590-600/t cfr, another trader says. "But there are no bookings. Buyers want to wait and see," he adds.
Similarly, there is no buying interest in Indonesia despite a drop in prices. Offers this week for blast furnace and EAF 5sp billet from Malaysia and Vietnam, and for EAF 5sp billet from Bahrain are at around $595/t cfr Indonesia, down from $620/t cfr last week. "All mills and traders are trying to liquidate [now]," a regional trader says. Despite the stable performance of Chinese steel futures in the past two days, regional buyers are still recuctant to re-enter the market, he notes.
On 22 January, Kallanish lowered its 5sp/ps or Q275 120/125/130mm square billet assessment to $585-595/t cfr Manila, down $7.5 week-on-week.
Source:Kallanish
