The unwinding of position cargoes has cooled down the Philippine billet market, Kallanish notes. A booking of Russian billet in the week through 10 February signals the market could see more Russian supply.

Traders’ position cargoes of ASEAN blast furnace 5sp grade billet for March shipment were booked at $595/tonne cfr Philippines in the middle of last week. These included a 30,000-tonne cargo of Vietnamese 150mm, as well as Indonesian 130mm billet. Kallanish assessed 5sp/ps or Q275 120/125/130mm square billet at $595/t cfr Manila, down $5 on-week.

A 2,000t Chinese-origin Q235 120mm billet cargo for April shipment was meanwhile offered at $602/t cfr Manila, with some hearing it was finally settled at $590/t cfr Manila.

A leading Philippine re-roller also ordered 26,000t of Russian 125mm 5sp grade billet for March shipment during the week at $550/t fob Vanino. The order attracted attention because Russia has largely been absent from the market since the outbreak of war in Ukraine. "The Russian mill is shipping billet without prepayment or any opening of LC. That is why buyers in the Philippines are interested,” a trader says. “Buyers will pay only when the material arrives.”

As the Russian mill is a non-sanctioned company, more of its cargoes are expected to make their way to the country. The mill’s 125mm billet will cater to the smaller mills in the Philippines. But the trading of Russian material, in general, is difficult, so other Russian mills, particularly those sanctioned, will not be returning to the country anytime soon, the trader says.

With freight estimated at $30-35/t for the bought Russian cargo, there is a $10-15/t discount compared to ASEAN billet trades, which is “fair”, another Manila trader says. He considers the price gap to be a “risk premium”. The Russian mill whose cargo was booked used to sell close to 500,000 tonnes/year of billet to the Philippines before the war in Ukraine, he notes.

Another regional trader reports market chatter that Russian billet, declared as Chinese billet, was previously booked at $560-570/t cfr Manila last month. “The supply of Russian billet will certainly create a two-tiered [price] situation,” a regional trader notes. Another Russian mill was heard to have sold 30,000t of vanadium-added billet at $615/t cfr Taiwan in the past week.