Weak demand and softening prices in the local billet market have been keeping billet import activity into China at a standstill. This has pushed suppliers to look for sales in the rest of Asia, with some occasional bookings done over the past week.
Local billet prices in Tangshan have lost another RMB 50/mt ($8/mt) over the weekend, coming to RMB 5,200/mt ($809/mt) ex-works, translating to $716/mt, excluding 13 percent VAT. At the same time, in other parts of China the tradable level has been at RMB 5,150/mt ($801/mt). Declines in long steel prices in China, not strong enough demand for construction steel, and the continuing restrictions on re-rollers’ production in the eastern part of the country have been putting pressure on billet demand in China.
As a result, “there are no trades for imports. China’s bids are very bad - $700-705/mt CFR as the highest,” a local source said. “There is no interest [for traditional ASEAN billet exporters] to sell to China, though some of them still have allocations,” an international trader said.
Occasional deals are only heard to other Asian countries like the Philippines or Taiwan. For instance, there has been information that the main Vietnamese producer has sold a cargo of not less than 20,000 mt to the biggest steel producer in the Philippines at $735/mt CFR, but this price included the huge extras for chemistry (as the steel grade was very uncommon) and transportation to port required higher charges (Davao, according to some sources). As a result, this price could not be taken as the real market level, which is at $710/mt CFR Manila at the highest for commercial grade billet, according to market participants.
A contract for an ex-Russia commercial grade billet has also been heard to Taiwan at $705-710/mt CFR.
$1 = RMB 6.43