Posted on 17 Jun 2024
Rerollers in ASEAN are seeing low-priced Chinese billet offers again. Traders have likely taken positions for billet in order to capitalise on lower Chinese steel prices after Shanghai steel futures plunged by over 1.5% on the first day after last week’s Chinese holiday on 10 June, Kallanish understands.
A leading reroller in the Philippines is heard to have ordered on 13 June 30,000t of 5sp-modified 150mm billet from China at $505/t cfr through a Chinese trader. The cargo is for August shipment.
On the same day, another Chinese trader was heard to have ordered at around $472/t fob for 3sp 150mm billet. Freight from China to Philippines is $20-25/t depending on tonnage, a Manila trader estimates. Open-origin offers for ASEAN/Chinese 130mm billet are closer to $515/t cfr Manila and to $510/t cfr for 3sp grade, he says. This is around $5/t lower on-week. The smaller 130mm billet is typically priced $5-10/t higher than 150mm billet.
An offer for 10,000t each for 3sp grade at $510/t cfr Manila and at $513/t cfr for 5sp grade was received on Wednesday, importing sources say. The offered cargo was for either Indonesian or Chinese-origin 130mm billet at seller’s option for shipment by end-August. Kallanish assessed 5sp/ps or Q275 120/125/130mm square billet at $513-515/t cfr Manila, down $3.5 on-week.
An Indonesian reroller says that he received an offer for Chinese 5sp 150mm billet on Friday at $514/t cfr Jakarta.
He thinks that $514/t cfr may be high because he estimates that the freight difference between Manila and Jakarta from China is only $3-4/t. However, the leading Philippine reroller could have benefited from lower freight due to the sizeable 30,000t order. The offer did not mention a tonnage but Chinese billet shipments can be as low as 5,000t, he notes.
A leading Indonesian mill’s offer was last heard for 3sp 150mm billet at $495/t fob, regional trading sources say. The mill's offer for 3sp grade 150mm billet was at $515/t cfr Jakarta on Wednesday, the reroller says. The premium for 5sp billet compared to 3sp grade is usually $6/t for the Indonesian mill.
Chinese billet offers are notably for August shipments, certain market sources note. "It could mean that traders think that the futures may go up. They hedge on the SHFE and will make up for it on the futures market even if they take a small loss on the physical short portion," a regional trader says.
Source:Kallanish
