ASEAN billet market slips on uncertainty

Posted on 29 November 2021

The billet import market has weakened during the past week in Southeast Asia. Deals are sparse as regional buyers are aiming to pay at below most offers, Kallanish understands. The market is being affected by uncertainty and price instability in China.

A deal for 20,000 tonnes of Russian 130mm 5sp billet for February shipment settled at $650/tonne cfr Manila on 25 November. A week ago, a supplier for Russian 125mm billet was inviting bids at $660/t cfr Manila but no deals were heard.

Some pre-selling by traders continues to cause bearishness in the market. A 10,000t parcel for 150mm 3sp billet for February shipment was heard ordered at $630/t cfr Taiwan. The cargo’s origin is stipulated as being from one of five mills at seller’s option. “I think this is a speculation trade,” a Taiwanese trader says, adding that offers are prevailing at $640-650/t cfr Taiwan but buyers are bidding at $630/t cfr. It is "clearly a short position. The seller is expecting the market to go down," a regional trader says.

Billet offers were prevailing on 25 November at $640-650/t cif Thailand, which did not attract takers. “Buyers want to see what happens this coming week,” a Bangkok trader says. He notes that the origin of these billet offers is not clearly specified.

Volatility in Chinese steel futures is also not helping with price stability. An Indonesian blast furnace mill was offering 150mm 3sp billet at $660/t cfr Jakarta on Thursday and Friday morning. The offer was then heard at $650/t cfr late on Friday afternoon. “It was offered at below $650 at one point, but then Chinese futures prices went up,” a Jakarta mill source explains. He notes that Chinese steel futures dipped on Friday.

The Indonesian mill’s export offer to the Philippines for 130mm 5sp billet was at $670/t cfr Manila on Friday after being at $650/t cfr mid-week.

Kallanish assessed 5sp/ps or Q275 120/125/130mm square billet on Friday at $650-655/t cfr Manila, unchanged on-week.

Source : Kallanish