Posted on 26 Apr 2023
The import markets for billet and wire rod have worsened considerably due to the fallout in the Chinese futures market. Traders are trying to short-sell cargoes by inducting bids at low levels, but buyers are steering away in the falling market, Kallanish notes.
Multiple offers for 5sp 130/150mm billet from China and ASEAN for June/July shipment have plummeted to $535-540/tonne cfr Manila from around $570/t cfr last Thursday.
“Traders are clearly short-selling,” a Manila trader says on Tuesday. “Market confidence is all shot."
He guesses that this was “triggered by the bloodbath in the Chinese futures market ... Market fears are becoming self-fulfilling prophesies."
However, there are also higher prices in the market, regional trading sources say. An Indonesian mill, while not active right now, is expected to offer billet at $560/t cfr Manila and Chinese billet from mainstream mills and Tier 1 traders are being offered at $550-555/t cfr Manila, a Singapore trader says. He acknowledges that, given the current weak state of the market, there would be “willing sellers at $535-540/t.”
Chinese-origin wire rod 6.5mm diameter offers have also dropped to $550-555/t cfr Manila, down by around $30/t from last week. Previously, these lowed priced cargoes were limited to several tonnes from Tangshan. The Manila trader believes that there is no limit now.
“Market confidence has all but evaporated,” he says.
Another Manila trader notes that these prices are not real yet because what sellers really want now are firm bids.
“It’s a collapse in the real sense of the word,” he notes.
"Mills are waiting for bids to negotiate," an importer says. "Everyone is (in) wait-and-see (mode)," he adds.
“All sellers are doing the seppuku now,” another Manila importer says, referencing the Japanese samurai ritual suicide. “All are dying."
In Thailand, 5sp 150mm billet from Iran and China is offered at $540/t cfr. A Bangkok trader says that he only received bids at $500/t from his Thai customers.
"Billet prices are going down further," he says.
Source:Kallanish
