Suppliers of Taiwanese billet to Southeast Asia have lifted their export prices by $20-40/tonne cfr in the past few days. Bookings made at lower prices of around $300-320/t cfr in the past week – Taiwanese billets were sold at $300-$305/t cfr Philippines and at $310-315/t cfr Vietnam – may have spurred mills to raise their export prices.
"The mills received too many enquiries. And certain mills have filled up their orders for the month and can wait before exporting again," says a Taipei-based trader. He wonders if real demand is behind these enquiries or whether traders are duplicating enquires from a few buyers. He estimates 30,000-40,000t in total (for end-November shipment) were booked to the Philippines and Vietnam.
"Some of the Taiwanese mills are saying that they do not need to export until next year," a regional trader says. Increased scrap prices may also have triggered the run-up in billet prices. Malaysian-origin billet is being offered at around $390/t fob which is not workable. Thai-origin billet is offered at $350/t fob.
Many were caught off-guard by the hike in offer prices and question whether buyers will accept. "It is a short-lived recovery," a trader in Vietnam says of the buying. While demand exists, difficulties in the opening of letters of credit remain a large problem in Vietnam.
"The jump is too soon and too much. Demand is still very weak," the regional trader says. "No-one knows if this is real rebound because there is still a lot of inventory everywhere," another tells.