Posted on 27 Jul 2022
The ASEAN billet market is expected to continue to fall further because of severely weak finished steel demand, Kallanish notes. Buyers are still shunning offers because of overall negative sentiment.
Offers for Malaysian blast furnace 120/130mm 3sp grade billet are heard at $500-510/tonne fob and for 5sp grade billet at $520/t fob. Malaysian 3sp billet is currently available at $530-535/t cfr, a Singapore trader says. The market segment for induction furnace billet is deteriorating quicker, with offers heard for Thai material at $470/t fob or $510/t cfr Philippines. “But no customers want to buy now,” a Chinese trader said on Tuesday.
Regional induction furnace billet prices are already near the $500/t mark, but not the EAF/blast furnace grades, a Manila trader said on Tuesday. Weak demand and poor confidence are hampering any market rebound in the near future, he notes.
Rebar demand fell suddenly at end-May and it is getting worse because of factors such as rising interest rates and surges in Covid-19 cases, an Indonesian mill manager says. The Indonesian domestic rebar market is currently at the equivalent of $600-620/t and with a $70/t rolling margin, 5sp grade billet imports need to be priced at around $530/t and below to be viable for re-rollers. An Indonesian mill’s 3sp blast furnace billet was quoted at $515/t fob or $540/t cfr Jakarta on 25 July. There is an $8-10/t premium for 5sp grade billet.
In Singapore, Malaysian theoretical-weight rebar is currently offered at $600/t truck-delivered, down $10/t on-week. Some deals for this same-mill-origin rebar took place at $640/t only two weeks ago.
Some traders think billet prices are set to fall under the $500/t cfr mark. A Bangkok trader says he is “100% sure that billet prices will go down below $500 cfr” in the ASEAN region. “Scrap prices keep falling and actual finished steel demand is not picking up,” a regional trader in Singapore says.
Regional blast furnace/EAF billet import prices last dipped under $500/t cfr in late 2020. Kallanish assessed 120-130mm 5sp billet at $495-500/t cfr Manila on 27 November 2020.
Source:Kallanish
