The Southeast Asian billet market continues to weaken due to the sharp fall in scrap prices. The decline in scrap prices has reduced billet production costs, putting downward pressure on prices. In addition, unconfirmed reports from various sources suggest that China's billet offers are also decreasing. If these claims materialise, the decline in billet prices in Southeast Asia may further increase.
Billet prices in the Philippines are currently hovering around USD 450-455/MT on CIF basis, down by USD 7-10/mt since the middle of last week. The market is probably trying to adapt to changes in demand dynamics or pressures from oversupply.
In Vietnam, producers adopted a more cautious attitude despite the overall downtrend in the market. They cut prices for February deliveries by only USD 5/mt, not going below USD 455/mt on FOB basis. This attitude of Vietnamese producers is attributed to either stable demand or high production costs limiting larger price cuts.
Developments in the Chinese Market and Their Effects
According to some information received by SteelRadar, billet prices may fall by USD 10-20/mt. Therefore, the decline in the Southeast Asian billet market may accelerate. SteelRadar market analysts expect prices to fall to around USD 440/mt. This situation points to the possibility that the market may enter a sustained downturn in the near future.
Steel Rebar Market in China
Steel rebar prices in China fell by 1.1%. This decline is due to changes in supply and demand dynamics. Although higher iron ore imports and lower costs helped Chinese mills to increase capacity, the demand side softened despite seasonal consumer interest. The Chinese government's prioritisation of new energy vehicles (NEVs) reduced demand for traditional automotive materials, negatively impacting the steel rebar market.
All these developments once again reveal the impact of supply, demand and geopolitical factors in shaping prices in the regional steel markets. The future of the markets is likely to be shaped by price movements in China and the production-consumption balance in Southeast Asia.
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