Consumers in Southeast Asia have scaled down their purchase of imported steel billet amid a slide in Chinese steel market for the semi-finished product and futures markets, sources told Fastmarkets on Tuesday October 20.
*** Chinese steel market
Chinese steel futures performed poorly on Tuesday following a slight uptick on Monday, while spot prices for billet in Tangshan have remained rangebound in the last week after a strong rise following China’s October 1-8 holiday commemorating its National Day.
Southeast Asian buyers entered the market last week and booked several billet cargoes off the back of China’s renewed interest in billet imports, but have decreased their buying activity sharply this week.
Fastmarkets’ daily price assessment for steel billet, import, cfr Southeast Asia, which mainly looks at 120-150mm 5sp grade billet sold into the Philippines, was $450 per tonne cfr on Tuesday, narrowing upward by $5 per tonne from a day earlier. Prices had been at $445-450 per tonne cfr since October 13.
***Japanese and Indian billet
Japanese 130mm billet was sold at $447 per tonne cfr Manila last week, while a position cargo of 5sp Indian blast furnace (BF) billet was sold at $450 per tonne cfr. Vietnam-origin electric-arc furnace (EAF) billet was also heard to have been sold at $450 per tonne cfr.
The only deal confirmed to Fastmarkets this week so far comprised 30,000 tonnes of Indian 3sp BF billet sold at $445 per tonne cfr Davao. The equivalent price for 5sp quality billet is $5 per tonne higher, at $450 per tonne cfr, a South Asian trader said.
Offers for 5sp billet from most suppliers are at $450-455 per tonne cfr this week, while most bids are around $440 per tonne cfr, sources said.
Bids for Japanese 5sp billet have been as high as $450 per tonne cfr Southeast Asia, a Japanese trader told Fastmarkets. But this is still too low and not workable for Japanese trading houses due to a strong yen.
“I am not too optimistic about China, but some traders are still trying to prop up the market. [Prices of around] $450-455 per tonne cfr Manila are only acceptable for buyers if they are desperate for material,” a trader in Singapore said.
“Chinese futures have been weak and Tangshan billet prices have dropped. Philippine buyers had said prices would shoot up after China came back before coming down again. Now they will try to [reduce prices again],” a second South Asian trader said.
*** Chinese steel market , billet
Fastmarkets’ daily price assessment for steel billet domestic in Chinese steel market Northern China was 3,420 yuan ($509) per tonne on Tuesday, unchanged week on week.
“There seems to be good demand for billet in Southeast Asia. Buyers are at $435 per tonne cfr but sellers are still at $450-460 per tonne cfr. India seems to be out of the picture still due to good local demand,” a European trader said.
The volume of Indian billet and slab on offer has fallen in recent months amid a reduction in government export rebates and an uptick in domestic steel consumption.
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