Posted on 02 Sep 2024
The billet import market in ASEAN has risen amid the uptick in the Shanghai Futures Exchange (SHFE), Kallanish notes. But transactions are trailing behind because of weak regional demand for finished steel.
Billet offers in the Philippines market for mostly open-origin ASEAN and Chinese 5sp grade 150mm billet for November shipment are quoted at around $475/tonne cfr Manila. This is up from $460/t cfr Manila during the week through 23 August. 130mm square billet commands a premium of around $10/t over 150mm billet.
It is difficult for buyers to accept higher prices when demand remains weak. “It’s tough,” a Manila trader says. Customers are not indicating any serious buying interest, he adds. Kallanish assessed 5sp/ps or Q275 120/125/130mm square billet at $460-465/t cfr Manila, up $5 on-week.
Meanwhile, an Indonesian mill’s export price seems to be stable at $445-450/t fob. Traders were heard to have ordered some 120,000-150,000 tonnes of 3sp 150mm base billet around 21-28 August, mostly to Turkey and a smaller tonnage to Egypt at this level. “Almost all bookings were by traders trying to cover their short positions since China rebounded,” a Singapore trader notes. On Friday, the mill continued to close deals at $445/t fob, trading sources report.
Interestingly, Chinese 3sp 150mm billet is still offered in Indonesia at around the same level as the week before, despite domestic price increases in China and the CNY appreciation. An Indonesian reroller says he received an offer for billet from southern China at $465/t cfr on Friday. He thinks the buyer can secure a lower price with a serious bid. “Most of us feel that prices will fall again because the China economy is bad,” he adds.
One supplier is offering at $460-465/t cfr, a Jakarta trader says. But the $5/t price difference is not sufficiently attractive when compared to the Indonesian billet price of $465/t cfr –freight is estimated at $20/t. Indonesian buyers can fix the local exchange rate for payment for the Indonesian billet, which reduces the risk of forex fluctuations, he argues. Importing billet also incurs payment of an upfront 2.5% duty, he adds. While this duty is refundable, this is not favoured by Indonesian customers.
Based on Friday's domestic prices in Chinna, a back-to-back export offer should be higher, at around $474/t cfr Jakarta, a Chinese trader notes.
Source:Kallanish
