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Kallanish Kallanish

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October, 19th 2021

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SEP 24
12:32

Chinese billet import market languishes, ASEAN market slows

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The Chinese billet import market has weakened, Kallanish notes. In ASEAN, the market has quietened down with lack of buying interest, as the region continues battling with Covid-19 cases.

Offers for 150mm 3sp billet from blast furnaces in Malaysia are prevailing at $720/tonne cfr China, and from Indonesia at $725/t cfr China, trading sources observe. Offers for Indonesian and Vietnamese blast furnace billet were at a maximum of $725/t cfr, a regional trader says. Another recounts that traders were receiving bids at $695-700/t cfr last Wednesday.

On Wednesday, an Indian mill awarded a spot tender for 30,000 tonnes of 150mm 3sp/4sp billet at $629.5/t fob on 100% advanced cash payment. Trading sources say this would translate to an offer of $710/t cfr China, including trader’s margin.

With the downward correction in Chinese steel futures on Friday, China's domestic billet market has similarly fallen. In Tangshan, spot billet fell on Friday by CNY 60/t ($9/t) from the previous day to CNY 5,170/t. Prices are down CNY 40/t on-week, after holding steady at CNY 5,230/t since 20 September.

Vietnamese blast furnace billet was offered at $688/t fob and, adding freight of $30/t and $5/t margin, this would translate to a quote of around $723/t cfr China, another regional trader says. “But there's no chance anyone will buy at this level,” he notes. He says he has not heard of any buying interest from any market in Southeast Asia.

“It is boringly slow this week,” a Philippine importer said on Friday. “An already slowing Chinese economy compounded today by Evergrande going bust is not a good development for China's domestic market conditions.”

Russian 125mm billet is heard offered at $710/t cfr Manila. Indian 130mm induction furnace billet is offered at $685/t cfr Manila but certain traders hear offers at $675/t cfr. “Some are inviting bids at $670/t cfr already,” a Manila trader says. He hears that higher freight costs to China could be spurring Indian mills to turn to export markets such as Southeast Asia.

Kallanish assessed 5sp/ps or Q275 120/125/130mm square billet on Friday at $695-700/t cfr Manila, down $2.5 on-week.

Anna Low Singapore