ASEAN Billet Import Market Collapses

Regional billet importers in Southeast Asia are taking a wait-and-see approach in a declining market. The regional finished steel market is very sluggish. “This is an illiquid market environment,” says a regional trader. The current month of fasting, the recent Thai Songkran holidays and the Easter holidays in the Philippines have reduced shopping activity in the region.

In Manila, more billet import bids fell to below $800 per tonne of francs. According to Vietnamese sources, Vietnamese-origin 120mm/130mm square 5-step EAF billets dominate at $785-795/ton in Manila. A Vietnamese induction furnace billet of similar size and quality is offered at $775/t. The Vietnamese plant also offers blast furnace billets at a price of $800 per ton. Offers from various sources ranged from $800-830/t cfr during the week of 4 April.

The supplier is currently offering Russian billets at $760-765/t, provided that the Philippine buyer can open a letter of credit. “The price is nice, but how do they open the LC?” says a merchant from Manila. According to him, Philippine banks avoid anything that bears the "name of Russia." "Zero business" for Russian procurement, he adds.

Rollers may not be able to get their hands on Russian billets, but this drop in bid prices and the redirection of goods from China are causing bearish sentiment in the market, a regional trader said. Last week there were rumors in the market about a rejected cargo of 4sp 6.5% Mn in billets at $760/t cfr Mn. Callanish lowered his estimate for a 5sp/ps or Q275 120/125/130mm square billet to $790-800/t cfr Manila, down $20 from the week.

Meanwhile, a 42,000 tonne cargo of 150mm three-blade blank from Oman, originally destined for China, is on its way to Thailand. 20,000 tons of cargo were booked on 21 April at a price of US$740 per ton CIF. “I heard that this is the last ship for this month and it will arrive in the last week of April,” says the Thai trader. The rest of the cargo is still available on the market. It is widely believed that the Omani stock is actually Iranian material. “All the cargo on the boats/water is Iranian stock,” says another.

Meanwhile, 20,000 tons of 150mm commercial Iranian 3sp and 5sp billets were also ordered on April 21 at US$757 per ton under Thailand cif terms. Callanish understands that the cargo was ordered at $695 per ton fob in a previous Iranian factory tender.

Source: Callanish