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Presidential candidate and former military general Prabowo Subianto has threatened to rally his supporters to conduct protests after alleging that voting and vote-counting processes were fraudulent.
Indonesia’s General Election Commission announced that incumbent president Joko Widodo – frequently referred to as Jokowi – had attained 56% of votes and was leading by 12 percentage points with more than 80% of ballots counted.
The Indonesian currency slid amid the political turmoil with the Indonesian rupiah was at 14,440 rupiah against $1 on May 17, compared with 14,081 rupiah to $1 on April 17 when the votes were cast.
The weakening rupiah is expected to affect how much buyers are willing to pay for imported steel, a re-roller source in Indonesia said.
Fastmarkets MB’s daily import price assessment for billet in Southeast Asia was $450-455 per tonne cfr Manila on Friday May 17, widening downward by $5 per tonne on the low end from May 16 and down from a price range of $455-460 per tonne the week prior on May 10.
Billet prices in Southeast Asia have trended downward since hitting a 2019 peak of $485-495 per tonne cfr Manila on March 14 because of weak demand in the key import markets of Indonesia and the Philippines.
During the week to Friday May 17, billet from the Commonwealth of Independent States (CIS) was sold at $455 per tonne cfr Manila while another shipment of CIS-origin billet was heard booked at $445 per tonne cfr Indonesia. Yet the latter transaction could not be verified and was not included in Fastmarkets MB’s assessment.
Russian suppliers had been bidding for material at $450-455 per tonne cfr Manila, while material from Malaysia was also available at $465 per tonne cfr Indonesia.
Turkey-origin cargoes were reportedly available at $450-455 per tonne cfr Indonesia, although those offers were likely withdrawn after the United States announced it would reduce tariffs on imports of Turkish steel to 25% from 50% on Friday May 10, market participants said.
Buyers in Indonesia indicated their interest at $450 per tonne cfr, although no firm bids were made, market sources said.
US sanctions on Iranian metal exports and the observance of the Islamic holy month of Ramadan, which typically results in shorter working days and reduced business activity, are also affecting Indonesian steelmakers, market sources said.
Iranian material is still on offer despite the US sanctions, although some buyers are deliberately staying away, even though prices are lower than exports from other origins, market sources in Southeast Asia said.
Iranian material was heard sold at $430 per tonne cfr Thailand and offered at $425-430 per tonne cfr Indonesia. Iranian prices are excluded from Fastmarkets’ assessment however, because they fall below mainstream levels due to the sanctions.
US president Donald Trump issued an executive order on May 8 to block US entities and foreign financial institutions from conducting business with Iran in in its iron, steel, aluminium and copper sectors.
There was also limited buying interest in the Philippines because of the country’s upcoming rainy season in June.
The construction sector typically slows down during this period so demand for material is expected to be weak, a trader in the Philippines said.
Escalating trade tensions between the US and China has also exacerbated the bearish market sentiment in Southeast Asia.
China announced it will increase duties on $60 billion worth of US goods from June 1 in retaliation after the US raised tariffs on $200 billion worth of Chinese products to 25% from 10% on May 10.
Buyers are likely to remain on the sidelines to await further clarity on steel prices, a trader in Vietnam said.
Market sources also cited declining steel scrap costs as another factor that will weigh on billet prices in Southeast Asia.
Fastmarkets MB’s weekly import price assessment for HMS 1&2 (80:20) sold into Vietnam was $315-320 per tonne cfr on Friday, unchanged from a week earlier yet down $30 per tonne since hitting a 2019 peak of $345-350 per tonne cfr on March 15.