ASEAN billet prices are on the rise, fueled by traders' buying activity, although end-user demand in the region remains sluggish, according to Kallanish reports. Bookings in the past week for regional blast furnace billet for July shipment took place at $495-498/tonne fob. Indonesian 3sp grade 150mm billet on 21 May was ordered at $498/t fob, including a 20,000t cargo booked to cover a spot contract to the Philippines. The Chinese trader, like some others, was taking profit from position-squaring amid the SHFE steel futures rally.
Some participants are seen to be taking a bullish stance. Also on 21 May, a different Chinese trader ordered 45,000t of Vietnamese 3sp grade 150mm billet at $495/t fob, according to Vietnamese mill and trading sources. In the Philippines, the Chinese trader withdrew a $520/t cfr Manila offer it had been pitching earlier in the week for 5sp billet from the same Vietnamese mill, citing unavailability of their Vietnamese billet allocation.
A regional trader recounts that the Chinese trader which booked the Vietnamese cargo told him that Indonesian billet prices will spiral to $503-505/t fob within the week, speculating that the Vietnamese billet is destined for Turkey or the EU. Chinese traders with recent purchases are telling the market that they paid $500/t fob, while another regional trader hears of Chinese traders wanting to sell at $500/t fob but doubts whether end-users, particularly in ASEAN, can accept $500/t fob.
The Vietnamese mill is heard to have sold out all its July shipment allocations after its 21 May sale, with a Hangzhou-based trader also booking 10,000t of billet from the mill on the same day. Meanwhile, offers for 150mm 5sp open-origin billet are prevailing at $525-528/t cfr Manila, and for 130mm billet closer to $530/t cfr or higher. Apart from a reroller's order for 26,000t for 5sp 150mm Indonesian billet at around $520/t cfr concluded earlier in the week, the Philippine market is essentially silent, with traders reporting no firm bids during the past week. Kallanish assessed 5sp/ps or Q275 120/125/130mm square billet at $525/t cfr Manila, up $5 on-week.
