Posted on 01 Feb 2021
Billet suppliers have cut their offer prices to Southeast Asia, Kallanish notes. However, most buyers are staying on the sidelines because they anticipate further price falls.
Offers in the Philippines are mostly prevailing at around $580/tonne cfr Manila, down $15/t week-on-week. The latest offers include those for Russian and Indonesian blast furnace billet. Vietnamese blast furnace billet is offered at $585/t cfr and induction furnace billet from India and Vietnam at $580/t cfr and $575/t cfr Manila respectively.
The same billet offers are resurfacing in the market without any takers, an importer says. He reports Vietnamese induction furnace and Russian EAF billet offers at $570/t cfr and $570-575/t cfr respectively. "Demand is rather inelastic," he says, describing the Manila market as "…near dead." Buyers are generally bearish and expect further price cuts, a Manila trader observes.
Traders appear to be more aggressive outside of the Philippines. In Thailand, they are offering Indonesian blast furnace billet at $560-563/t cfr Thailand. Some traders say these could be the unloading of traders' position cargoes. A Thai trader reports that Vietnamese blast furnace billet was recently booked at $545/t fob ($557-560/t cfr Thailand). Indian billet for February/March shipment was booked at $585/t cfr Thailand during the week ending 22 January.
In Indonesia, certain traders are giving offers for Vietnamese billet at $575/t cfr, an Indonesia re-roller says. But he received the offer for billet from the same Indonesian blast furnace mill on 28 January at $585/t cfr Jakarta and believes the mill would not yet lower prices to $560/t cfr. On 29 January, Kallanish lowered its 5sp/ps or Q275 120/125/130mm square billet assessment to $570-575/t cfr Manila, down $15 week-on-week.
Meanwhile, Indian billet prices have similarly fallen. On 28 January, an Indian mill awarded a 30,000-tonne March shipment 150mm 3sp/4sp billet cargo in a spot tender at $532/t fob. The Indian mill's last export tender fetched $578/t fob in mid-January.
The sharp price fall reflects "…today’s market reality", says a regional trader who adds that in the tender, "…there was only one bidder”. Traders hear that the awarded cargo is destined for Sri Lanka. Freight would cost up to $15/t, a trader estimates.
Source:Kallanish
