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Kallanish Kallanish

Knowledge matters Knowledge matters

December, 3rd 2021

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NOV 19

Diverted Chinese billet cargoes depress ASEAN market


Low-priced deals for diverted Chinese billet cargoes continue to weigh down Southeast Asian billet import markets, Kallanish notes. Regional importers think prices will spiral down further.

Indian 150mm 3sp tendered billet was recently booked at $618-620/tonne cfr Indonesia and will arrive during the week ending 26 November. The 20,000 tonnes are part of a 60,000t parcel which a Chinese trader redirected to Indonesia. 

During the 12 November week, 20,000t of the same billet cargo was booked at $645-650/t cfr Indonesia. The seller first started selling the cargo at more than $660/t cfr Indonesia several weeks ago. Buyers in Thailand and Indonesia now want to pay $620/t cfr or below, he notes.

During the week through 19 November, the same Chinese trader sold 21,000t of 150mm 3sp Ukrainian for prompt shipment at $620/t cif Ko Sichang, Thai trading sources report. The trader also sold 25,000t of Russian 150mm 3sp billet at $625/t cfr Thailand.

A 20,000t cargo of Russian 150mm 3sp billet for December shipment is currently offered at $620/t cfr Manila. The trader is re-selling the position China-diverted cargo at a loss, a Manila trader notes.

A Russian mill is currently soliciting bids for fresh-production 125mm 5sp grade billet at $660/t cfr Manila. A Manila trader does not think it will be easy to find a buyer even at $650/t cfr. “Nobody is bidding. Market prices are still dropping,” another trader observes. Indonesian blast furnace 150mm 5sp billet is also currently offered at $652/t cfr Manila for shipment by early February. Also, there is 120/130mm blast furnace billet from Malaysia for February shipment offered at $650/t cfr Manila.

Traders are also inviting bids for 150mm or 90mm 3sp or 4sp billet from India without giving indicative offer prices. However, for 150mm billet, the 3sp or 4sp grades are unpopular in the Philippines and few re-rollers use 90mm billet, a source says. Induction furnace 130mm billet including 5sp grades is offered at below $650/t cfr Manila.

Kallanish assessed 5sp/ps or Q275 120/125/130mm square billet on Friday at $650-655/t cfr Manila, down $10/t on-week.

"These low prices for position cargoes have brought down ASEAN customers' price ideas to around $600/t cfr levels," a Chinese trader says. However, the Chinese futures market increased on Friday, so it may be hard to sign new cargoes will mills even at $650/t cfr in the coming week, he says.

Anna Low Singapore