Prices for import billet in China have kept surging early this week and new deals for billet of different origins have been disclosed today, April 6, the first working day in China after the holiday since late last week.
The tradable level for ex-ASEAN billet in China has risen to $660/mt CFR on Tuesday, April 6, up by $20/mt from that reported on April 1. Market sources confirmed a deal for 150 mm billet from Indonesia at $650/mt CFR late last week and another contract at $655/mt CFR from Malaysia. In total, up to 50,000 mt were traded in these deals. Also, the seller from Vietnam is in negotiations with China at $660/mt CFR, which is said to be workable for today. Most ASEAN-based sellers have already hiked offers to $670/mt CFR China.
New tradable level and bids for non-ASEAN billet have been reported at $645-650/mt CFR today. A deal for a sizable lot of 50,000 mt from Ukraine has been rumoured at $650/mt CFR, but this could not be confirmed by the time of publication. Some sources said that the price is in line with the current market conditions, but there are doubts that the producer has such a big available lot. Moreover, it has been pointed out that the chemical composition of the billets is different from the base grade and that the extras should be included in the price. The freight from the Black Sea to China has been estimated at not below $60/mt. CIS-based sellers from both the Black Sea and Russia’s Far East have been interested in selling to China, seeing surging prices there and having a lack of outlets where such prices could be accepted, sources have said.
Indian billet sellers have also been in the market. Some fresh offers from India have been heard at $660-665/mt CFR China. A deal from India has been heard at $650/mt CFR, but some sources said that it was at a lower level last week.
"China has become the major driver for the global billet market. Indian and Iranian sellers are active. It is a good market for CIS producers, so all eyes are on China," an international trader said.
The sharp rise in the import billet prices in China reflects a booming local market. Mills in Tangshan, seeing tight supply, have increased prices for billet to RMB 5,040/mt ($769/mt) ex-works, up by RMB 80/mt ($12/mt) compared to Friday, April 2. Stockists’ average billet price in China has surged by RMB 135/mt ($21/mt) over the same period to RMB 4,953/mt ($756/mt) ex-warehouse, according to SteelOrbis’ information. Apart from the tight supply due to the latest production cuts in Tangshan and strict control of its implementation, the market sources report strong demand for billet, supported by high margins of longs producers. The local Chinese rebar and wire rod market has posted a sharp rise over the past week and prices have reached the highest level since the middle of 2008. The average rebar price in China has skyrocketed to RMB 5,123/mt ($782/mt) ex-warehouse, up by RMB 106/mt ($16/mt) compared to Friday and RMB 223/mt ($34/mt) over the past week.
$1 = RMB 6.5527