SE Asia: Imported billet market bearish amid bid-offer disparities

South East Asia's imported billets market sentiments continued to remain sluggish on the back of insufficient demand in the region, lower trades amid bid-offer disparities and volatility in Chinese rebar futures. Meanwhile, market participants have adopted a wait-and-watch mode with price cut expectations, BigMint observed.

Also, South East Asia's supply chain is experiencing turbulence, due to a shortage of vessels and containers, which is driving up freight rates to unprecedented highs. Recent reports indicate that businesses across Malaysia, Thailand, Vietnam, and other neighbouring countries are facing significant challenges in securing shipping capacity, leading to disruptions and soaring costs.

BigMint's bi-weekly assessment of billets (150x150mm, 3SP) imported by the Philippines currently stands at around $520/tonne (t) CFR Manila, a fall of around $5/t, w-o-w.

Meanwhile, a CIS player was heard to have concluded some billet volumes (5SP) to Manila at around $513/t CFR. However, the quantity could not be confirmed at the time of publishing the article. But, the price at which the deal has been concluded clearly shows that buyers' bids are at comparatively lower levels.

Market highlights

• Vietnam's billet export offers unchanged w-o-w: Vietnam's BF-grade billet export offers stood unchanged w-o-w at around $500-505/t FOB with no active trades. Weak steel demand persists in Vietnam, exacerbated by the imminent monsoon season. Meanwhile, the country's imported bulk ferrous scrap offers remained range-bound amid uncertainty in market trends. Buying interest is muted amid the prevailing uncertainty, particularly in the downstream steel sectors.
  
  
• Thailand's imported billet prices stable w-o-w: Thailand's imported billet offers remained stable w-o-w at $520-525/t CFR. Meanwhile, the country's billet imports dropped by 32% y-o-y to 580,589 t in January-April, 2024 as against 848,031 t in the same period last year, according to the customs data maintained by BigMint.
  
  
• Indian billet export market awaits tender results: State-owned Vizag Steel (RINL) has floated an ocean sale export tender for 30,000 t of steel blooms (150x150 mm, 3SP/4SP) on FOB ST delivery basis against 100% advance payment terms. The last date for bid submission is 10 June, 2024 and delivery is scheduled for 15 July, 2024.
  
  
• Iranian steel billet export market sees limited trading: Iran's billet export market continued to remain silent this week with prices stable on a weekly basis. No major billet export tenders have been heard in recent times. In the meantime, sources said that the Iranian government has imposed electricity restrictions due to high temperatures in the scorching summer to prioritise household consumption.
  
  
• China's steel billet prices inch down w-o-w: Billet prices in Tangshan dropped significantly by RMB 80/t ($11/t) w-o-w to RMB 3,430/t ($473/t) on 7 June, 2024. Volatility in raw materials, finished steel prices, rebar futures throughout the week along with lower trades weighed on billet prices. Prices include 13% VAT. SHFE rebar futures (October, 2024 delivery) decreased by RMB 51/t ($/t) w-o-w to RMB 3655/t ($504/t) on 7 June, 2024.