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Recently, the ASEAN steel billet market has experienced significant price fluctuations, influenced by factors such as weak regional demand, currency exchange rate fluctuations, trade policies, and global economic conditions. Although a rise in Shanghai Futures Exchange prices led to a slight increase in the billet import market, overall trading activity has not kept pace with the price increases.
In the Philippines market, prices for 5sp-grade 150mm billets scheduled for November shipment rose to $475/ton CFR Manila, up from $460/ton in the week of August 23. However, due to weak finished steel demand, buyers have limited acceptance of higher prices, leading to less active market trading.
The situation in the Indonesia market is also representative. A major Indonesian steel mill kept its export price at $445-450/ton FOB, with traders ordering 3sp 150mm billets primarily for export to Turkey and Egypt. This indicates that despite rising domestic prices in China and the appreciation of the yuan, the prices for 3sp 150mm billets in Indonesia have not changed significantly. Market participants generally believe that due to uncertainties in the Chinese economy, prices may drop again.
Currency exchange rate fluctuations have also significantly impacted the market. Indonesian buyers prefer purchasing local billets, paying in fixed exchange rates to mitigate foreign exchange risks. Additionally, imported billets are subject to a 2.5% prepayment duty, adding extra trade costs and affecting their market competitiveness.
The Southeast Asia slab market also reflects the delicate balance of supply and demand. Despite a short-term boost in market sentiment from the rebound in black futures, market participants remain cautious about future price trends due to ongoing weak demand. Prices for SAE1008/SAE1006 slabs in Southeast Asia are around $465/ton CFR, while steel mills in Indonesia and Malaysia have raised their prices and fulfilled their sales quotas, making them less eager to sell in the short term.
Overall, the ASEAN billet market is facing challenges from weak demand, and price volatility is influenced by various factors. Market participants need to closely monitor global economic conditions, currency exchange rate fluctuations, trade policies, and the balance of supply and demand to make more informed decisions. In the current market environment, billet prices are expected to remain volatile until there is a noticeable improvement in demand.
