Southeast Asian billet rises, Chinese importers on sidelines

Posted on 14 September 2020

The Southeast Asian billet import market continues to rise, Kallanish notes. Prices may be close to peaking because Chinese import buying, the region's market driver, has cooled down.

Japanese EAF billet was ordered at $450/tonne cfr Manila during last week. Also, 30,000 tonnes of Russian 100mm square billet for December shipment was booked around Tuesday at $450/t cfr, up from $440-445/t cfr at the end of the week through 4 September.

Importers accepted the cargoes at $450/t cfr because they are firm offers, a Manila trader says, adding that other offers in the market are subject to reconfirmation.

These are for 10,000t of 125mm 5sp modified billet for October shipment, from another Russian mill, at $448/t cfr, and another for 45,000t of Black Sea 130mm billet for October/first-half-of-November shipment at $446/t cfr. “It is hard to consolidate” the large tonnage for the Black Sea billet, the trader notes. Because regional market sentiment could be softening, domestic billet prices in Manila may drop soon, he adds.

Customers placed the recent orders because they are hedging against further price increases. He believes the Japanese billet order was only for 6,000t. “The weak dollar against the stronger Philippine peso is partially negating the recent price increases,” he observes.

Suppliers remain bullish and new offers, including one for Russian 130mm 5sp modified billet, are now higher, at $460/t cfr, traders say.

On Friday, Kallanish raised its 5sp/ps or Q275 120/125/130mm square billet assessment to $445-450/t cfr Manila, up $5 on-week.

Meanwhile in China, import buying has quietened down with trading sources reporting that no deals were concluded during the week. “Nobody is bidding; everyone is just watching [the market],” a Chinese billet trader said on Friday.

Domestic billet sales prices have come down by $15/t in tandem with the drop in Chinese steel futures, he notes. And with the large volume of billet imports in China, he and others fear billet prices will fall further. ASEAN blast furnace billet was booked two weeks ago at around $445/t cfr China, whereas current offers are at around $460/t cfr.

Chinese domestic billet in Tangshan traded at CNY 3,400/t ($497/t) on 11 September after having peaked at CNY 3,500/t on 7 September.

Source : Kallanish