The situation in the import billet market in Asia has visibly improved by Wednesday, July 7, following more deals signed with China at higher prices. As a result, the tradable price level in the rest of Asia has also gone up.
Another contract for ex-Indonesia 3SP billet has been reported at $680/mt CFR China, up by $10/mt compared to the previous deal for the same origin billet reported earlier. In addition, a Vietnamese producer has closed a contract for 5SP billet (at least 20,000 mt, according to sources) at $657/mt FOB, with the freight assessed at $28/mt as the lowest, corresponding to $685/mt CFR China, SteelOrbis has learned.
After this, offers for 5SP BF billet from Vietnam to China have increased to $665/mt FOB or at least $693/mt CFR and, though some sources said that the deal at this level has already been done today, this information could not be finally confirmed in the market by the time of publication.
“Today, the possible trade price in China for billet will be $680-690/mt CFR. The raw material is supported by demand from all over the world, plus consumers can accept higher prices for billets, so I feel prices will go up further,” a local source said.
Steel mills in Tangshan have increased their billet prices by RMB 70/mt ($11/mt) today to RMB 5,000/mt ($772/mt) ex-works. This translates to $683/mt, excluding 13 percent VAT.
Rebar futures at Shanghai Futures Exchange have surged by 3.3 percent today or RMB 176/mt ($27/mt), closing at RMB 5,439/mt ($840/mt) on July 7.
Higher demand from China has pushed up prices for import IF billet as well. According to sources, ex-Thailand billet has been sold at $630/mt FOB to China with freight at $30-35/mt, and so the final price corresponds to around $660-665/mt CFR. This is $10/mt above the offers for IF billet heard to China and Southeast Asia late last week. A deal for lower quality IF billet from India was done at $640/mt CFR China last week.
The major reason behind the recent billet price increase in China are the expected steel production cuts expected in many provinces in China in the second half of the year as the government has called on steel mills to keep their total crude steel production in 2021 at the level of last year.
Much better sentiment in China and improved imports have supported prices in the rest of Asia. For instance, the deal price level for import billet to Taiwan has increased to $680-685/mt CFR. In the Philippines, “some small cargoes were traded here and there,” a trader source said, with the price level for EAF/BF billet assessed at not below $680/mt CFR, while it was at $670-675/mt CFR last week.
$1 = RMB 6.4762