Prices for imported billet in China have hit and exceeded $400/mt CFR recently in a number of deals, including one from the Black Sea region. Suppliers have increased offers further: however, sentiments have weakened today after the fall in futures prices in China.
Ex-CIS billet prices rise mainly owing to China
A contract from Ukraine has been signed at $400-403/mt CFR to China this week, according to a number of sources, though it has not been finally confirmed by the time of publication. The freight cost from the Black Sea to China is assessed at $30/mt maximum, and so this price level translates to $370-373/mt FOB, sources said. As SteelOrbis reported earlier this week, the previous deal from the Black Sea was concluded at $395/mt CFR or $365/mt FOB.
At the same time, this price level is the highest for exporters from the Black Sea region recently. Offers to different destinations, not only to Asia, have been heard at $370/mt FOB and above, but only China has accepted this level so far.
A cargo of 10,000 mt of Ukrainian billet has been sold at $349-350/mt FOB from the Azov Sea recently. The price level from the mill is usually $5-10/mt lower than the level offered from large mills. Some small tonnage of ex-CIS billet originating from a second-tier mill has been sold to Tunisia at $370-375/mt CFR, according to sources. This level is equivalent to $355/mt FOB and slightly below. Offers from large steel mills from the CIS to North Africa and the GCC at $370/mt FOB for July-August shipment.
Customers in Turkey have been not interested in purchases of any sizable volumes. It is still possible to get $375/mt CFR or $360-365/mt FOB, sources have said.
The SteelOrbis daily reference price for ex-CIS billet has increased from $357-365/mt FOB to $365-370/mt FOB.
China’s outlook changes after a number of deals
Apart from a contract from Ukraine, Chinese traders have booked Indian billet at $400/mt CFR, as SteelOrbis reported earlier. Some small tonnage from one of the not traditional suppliers out of the Asian region has been traded at slightly above $400/mt CFR.
High demand has been seen for Southeast Asian billet this week. Offers for Vietnamese billet have been heard at $415/mt CFR, while offers for Malaysian billet have been at $417/mt CFR for August shipment. Earlier this week, negotiations for ex-Vietnam material were reported at $410/mt CFR China.
Offers from Russia’s Far East to China have been at above $400/mt CFR this week, but there has been no information about transactions in this destination.
On June 4, futures prices for rebar at the Shanghai Futures Exchange have dropped to RMB 3,606/mt ($508/mt), decreasing by 0.93 percent or RMB 34/mt ($4.8/mt) compared to the previous trading day. Though spot billet prices in China have not moved down yet, sentiments have been hit. Today, June 4, Tangshan billet prices are stable at RMB 3,330/mt ($469/mt). According to Chinese traders, it will be hard to reach $400/mt CFR in deals for non-Southeast Asian billets in the near future.