Posted on 20 Aug 2021
Billet import prices have fallen in tandem with the recent slide in Chinese steel futures, Kallanish notes. Despite Southeast Asian countries facing a plunge in steel demand amid Covid-19 lockdowns, suppliers were previously unwilling to make significant cuts in prices until this week.
Regional traders are offering Vietnamese and Indonesian blast furnace billet at $670/tonne cfr Southeast Asia on 19 August. Just the day before, offers from these two leading regional mills were at $690/t cfr and offers were around $705-710/t cfr on 13 August.
“Prices of billet and rebar fell by $20-30/t because China’s steel futures crashed,” a mill manager in southern Vietnam says. He heard that the above-mentioned Vietnamese mill was now offering billet at $640/t fob. “Demand is not good, all the mills are exporting now,” a Vietnamese trader says.
The Vietnamese mill is accepting firm bids at this level for September and October shipment, another trader notes. “They still have a lot of allocations for September because they are unable to sell in the local market,” he explains. The other Vietnamese mills are facing the same situation of very poor sales of billet, wire rod and rebar in the local market on account of Covid-19 lockdowns which commenced last month.
The lowered ASEAN billet prices are not competitive enough for import into China where domestic prices are tumbling too, Chinese traders say. “The prices are still higher than the domestic market rate,” a trader says. In China' Tangshan city, billet prices have retreated sharply in the past week to CNY 4,880/t ($752/t), down CNY 100/t on-day and CNY 210/t lower since 16 August. This is roughly an import equivalent of $650-655/t, another Chinese trader estimates.
Source:Kallanish
