Posted on 25 Jul 2022
The ASEAN billet import market continues to head south, Kallanish notes. Negative factors, including rising inflation and the prospect of an economic slowdown, coupled with short-selling by traders, continue to dent market sentiment.
Traders are still quoting open-origin short position offers for blast furnace 130mm 5sp billet from Malaysia and Indonesia at $530-535/tonne cfr Manila, up from $555-560/t cfr a week prior, a Singapore trader reports. Suppliers are inviting bids for EAF billet from Malaysia and Indonesia at $540/t cfr, a Philippine re-roller says.
The offers are for shipment by end-September. For such short-position sales, traders will always want as much time as possible. This includes time to wait for the market to go down and then cover the position with a mill's production and to fix the vessel, the Singapore trader notes.
Traders are also short-selling induction furnace billet from Thailand and Vietnam at $515-520/t cfr Manila, down from around $545/t cfr a week earlier. “These prices are not necessarily indicative of the true market level but rather reflective only of the level of pessimism, recklessness and/or courage of sellers,” a Manila trader says. “Nothing surprises me anymore in this depressed market.” Bids for induction furnace billet are currently at $500/t cfr Manila, a Vietnamese trader says.
Regional mills are still offering blast furnace or EAF billet at $530/t fob, a regional trader notes. An Indonesian mill's 150mm 5sp billet offer is at $560/t cfr Jakarta, an Indonesian re-roller says.
The same Indonesian mill is offering 3sp/4sp billet at $515/t fob but it cannot compete with Iranian and Russian billet at $525/t cif Ko Sichang and $515/t cfr respectively, a Thai trader says. "There is no buying interest or demand. It's raining too," he comments. Steel prices are falling continuously but no one can tell where the bottom is and when prices will stabilise, he adds.
"It is a terrible market where rebar is priced below cost," another Manila trader says. Re-rollers are being forced to slow down production and operate shorter hours because inventories are piling up, he notes. “Finished steel demand has to recover,” the Singapore trader says. “The market could improve possibly in late August for end-September or early-October shipment.”
Kallanish assessed 5sp/ps or Q275 120/125/130mm square billet at $530-535/t cfr Manila, down $20 on-week.
Source:Kallanish
