Posted on 17 May 2021
The downturn in China's steel futures has cooled the billet import market, Kallanish understands. Billet importers in Southeast Asia are taking a wait-and-see stance and are waiting for clarity after China's market downturn.
Chinese import prices escalated to record-highs the week after the Chinese labour day holiday. ASEAN billet was heard offered as high as $800-810/t cfr China early 14 May week. Many regional traders heard that ASEAN billet was booked at peaks of around $790/t cfr China. A few heard some exporters managed to sell at $800/t cfr. However, Chinese trading sources heard lower levels. “No one booked at $800/t cfr,” a Chinese trader says. But he guesses that prices will stabilize this coming week. “Offers are still high, some even above $805/t cfr. But bids have retreated to under $770/t cfr,” a trader says on 14 May. Another Chinese trader reports an offer for Japanese EAF billet on 13 May at $760/t cfr China.
In the Philippines, suppliers have not lowered offers as yet. Offers for Vietnamese induction furnace and EAF billets are around $780/t cfr Manila and Indian induction furnace billet at $750-755/t cfr. Indian blast furnace billet is targeted at $800/t cfr Manila.
The direction of the billet import market is uncertain for now. Suppliers say the Chinese downward correction is “only a temporary setback because of (China’s) PM Li’s remarks about high commodity prices and that they expect the market to bounce back shortly,” a Manila trader says. He received a bid for a Japanese EAF billet cargo at $760/t cfr Manila which he heard was finally sold at close to $770/t cfr Taiwan. That was when the market peaked on 12 May. "People probably won't bid any price now while the futures market in China appears to be in freefall," he adds.
A Philippine importer, who also heard of bids rejected by sellers who wanted higher prices, is not aware of recent deals taking place. On 14 May, Kallanish assessed 5sp/ps or Q275 120/125/130mm square billet at $730-735/t cfr Manila, $25 higher on-week.
Meanwhile, China's domestic billet market fell by CNY 150/t on-day to CNY 5,670/t ($881/t) in Tangshan. This is the same level as on 11 May.
Source:Kallanish
