Southeast Asian billet nudges up on Chinese buying

Posted on 29 March 2021

Chinese billet import buying is once again lending support to the Southeast Asian regional market, Kallanish notes. However, regional importers are resisting rising offers because of quiet home markets.

A 20,000-tonne cargo of Russian 125mm square billet for May shipment was recently booked at $600-605/tonne cfr Cebu, Philippines. Traders say that the buyer, a leading re-roller, secured a good price for the cargo because the billet size is not popular in China. "It has been very quiet this week," a Manila trader said on Friday. The new wave of Covid-19 infections and fears of tightened movement restrictions in the country have greatly slowed down business activity.

Offers for regional blast furnace billet from Indonesia and Vietnam were pegged on Friday at $615-620/t cfr Manila, up $5/t from earlier in the week. Buyers, generally, cannot accept such a high price, says another trader. Russian 5sp modified 130mm billet is currently offered at $620/t cfr, he adds.

In Thailand, importers are shunning billet offers, which are now at over $600/t cfr. “Thai customers are looking to book at around $590/t cfr only,” a Bangkok trader says. Imports are uncompetitive because domestic billet is at the equivalent of around $590/t in Thailand, he adds.

Indonesian re-rollers say current offers of around $620/t cfr Jakarta are simply too high for the quiet market. This includes blast furnace billet from Sulawesi offered at $620/t cfr, as well as Turkish billet at $625/t cfr. “There are no takers for billet imports because the rebar business is extremely bad,” an Indonesian re-roller says. Another does not expect demand to pick up until June after the Eid celebrations.

Blast furnace 150mm 3sp billet from Vietnam was recently booked at $617/t cfr China, and fresh offers have gone up to $620/t cfr. Indian billet was similarly ordered at $605/t cfr China, and offers are now heard at $610/t cfr. “Indeed, China is driving the market,” a regional trader notes. 15,000t of Vietnamese induction furnace billet was also ordered at $617/t cfr China on 25 March, for May shipment, Chinese trading sources say.

On 26 March, Kallanish raised its 5sp/ps or Q275 120/125/130mm square billet assessment to $600-605/t cfr Manila, $5 higher on-week.

Source : Kallanish