Posted on 01 Aug 2022
The billet market softened in the Philippines in the past week, Kallanish notes. But the recent pick-up in China’s physical and futures steel markets in recent days has provided relief for sellers in a continuously falling market. Suppliers started to hike offer prices on Friday.
Offers for blast furnace/EAF billet from ASEAN rose on Friday to $540-545/tonne cfr Manila for 3sp grade. Offers for 5sp grade billet are tagged at around $5-10/t higher. Thai induction furnace 3sp grade billet is currently offered at $520/t cfr. These are roughly $10-15/t higher than two days before.
A 20,000-tonne cargo of Malaysian blast furnace 3sp grade 120mm billet for September shipment was heard booked at $490/t fob. This would translate to $525/t cfr Philippines with freight estimated at $30/t and margins at $5/t.
The Malaysian mill was offering at $490/t fob on Thursday but later ran out of allocations, a Chinese trader said on Friday. “I think more mills will increase following China’s [upward] price trend next week.” An Indonesian mill meanwhile hiked its billet on Friday by $5 to $540/t cfr Jakarta for 3sp grade billet, an Indonesian re-roller says.
Japanese SD295 grade billet was heard booked on 27 July at $505/t cfr Philippines. The typical cargo size for such Japanese EAF billet deals is 6,000t. A trader reasons that the lower price could be due to less-preferred chemistry because buyers typically use 3sp or 5sp grade material.
“Demand is weak but not dead,” a Manila trader says of the recent deals. “The blast furnace and EAF mills are trying to bump up billet prices,” a Manila re-roller says. While he acknowledges that “billet makers are losing money”, he notes that “the market is simply weak”. A regional trader says: "It's about time things start to pick up.” But he adds that "the entire region is still purely driven by China.”
Kallanish assessed 5sp/ps or Q275 120/125/130mm square billet at $525/t cfr Manila, down $7.5 on-week.
Source:Kallanish
