Local billet prices in China have increased further lately and buyers have become more active in voicing their inquiries to foreign sellers. As a result, offers from major mills have increased to China today and market sources are waiting for new deals.
Indonesian steel mill Dexin Steel has announced its offers at $625-630/mt CFR China, versus $610-615/mt CFR in previous deals for 60,000 mt heard last week. “Demand is going up, though I am not sure if the company has been successful in signing deals already,” a trading source said.
At the same time, a buyer in Taiwan has already accepted a higher price from Dexin and a deal has been heard at $625/mt CFR this week, even though previously most bids were at $610-615/mt CFR maximum.
“RINL has a spot tender for 60,000 mt of billet, expecting to sell at $590-595/mt FOB to non-China destinations, maybe Egypt,” another source said, explaining that ex-Indonesia offers may still be the most attractive for Chinese importers.
The average ex-warehouse price in China has reached RMB 4,483/mt or $623/mt, excluding 13 percent VAT, which is RMB 20/mt ($3/mt) higher than last Friday and as much as RMB 118/mt ($18.5/mt) up over the past week, according to SteelOrbis’ data.
The highest tradable prices are in Jiangsu Province, where the import price of $625/mt CFR is “pretty reachable since their local [ex-warehouse] prices are above $630/mt [excluding VAT],” a source said.
The local mills in Tangshan are offering at RMB 4,370/mt ex-works, stable today and RMB 20/mt ($3/mt) higher since last Friday, which is, however, still equivalent to only $607/mt without VAT.
This means that rising demand and better sentiments have pushed the reference price for imported billet in China up by $10/mt from last week, to $620-625/mt CFR.
Some suppliers expect prices in China to go up a little more before starting active negotiations, as until now the tradable level in Southeast Asia is better.
Following losses since late December, prices have increased from their previous lows. At the moment, the tradable level to Manila is said to be at $635/mt CFR minimum, up by $5/mt or more from the previous offers. One deal for ex-CIS billet has been reported at $650/mt CFR or slightly above to the Philippines, but as the final port will be not Manila and freight adjustment is needed, the price is equivalent to around $635-640/mt CFR Manila.
“At the moment, there are hardly any prices below $630-635/mt CFR,” one seller said.
Last week, the SteelOrbis reference price for imported billet in Southeast Asia (excluding ex-Iran billet) was at just $615-625/mt CFR.
$1 = RMB 6.3684
