Posted on 24 Jun 2021
A Vietnamese mill’s recent billet export sale reflects weakness in the Southeast Asian and Chinese billet markets. Sluggish regional home markets are pressuring mills to lower export prices, Kallanish understands.
The Vietnamese mill sold around 40,000 tonnes of blast furnace billet for shipment by mid-August to China and the Philippines at $650/tonne fob. The sales involve an estimated 20,000t cargo for 150mm 5sp billet at $675-680/t cfr Philippines and another cargo for 150mm 3sp billet at $680/t cfr China. The mill was last week aiming to export at $670/t fob after achieving this price – or $695-700/t cfr China – for a 40,000t cargo on 11 June.
The latest booking price to the Philippines was below offers for 130mm square blast furnace/ billet at $700-710/t cfr late last week. Previously, a booking for 100mm billet from Russia settled at $690/t cfr on around 11 June.
The Chinese domestic market is very weak and some Chinese trading sources have expressed surprise at the deal. The Vietnamese mill’s price of $650/t fob is too high for the China market, a Chinese trader says. “We will not buy at this price,” he says. Domestic spot prices were soft in Tangshan at CNY 4,820/t ($744/t) on 23 June. This was up CNY 20 on-day but CNY 140 down since 18 June.
Most market participants say the reported price of $665/t cfr China/Jakarta for an Indonesian blast furnace cargo sale on 22 June is too low for the Sulawesi-based mill. The mill’s quote for 150mm 3sp billet is at around $675-680/t cfr Jakarta, a Jakarta mill source says.
“Demand in the local market is slow,” a Vietnamese trader says, explaining why Vietnamese suppliers cut export prices. “Lockdowns are taking place in many cities. Construction of big projects has slowed down greatly or is suspended,” he adds.
Source:Kallanish
