Prices for import billet have continued to move on an uptrend in China with the latest deals late last week confirming this. Moreover, prices are expected to rise further in the very near future as local prices for billet in the country have posted a sharp increase over the weekend, boosted by the expectations of a possible supply shortage after the production cuts announced in Tangshan.
Chinese producers in Tangshan have been offering billet in the local market at RMB 4,620/mt ($709/mt) ex-works on Monday, March 22, which is up by RMB 130/mt ($20/mt) from Friday, March 19, SteelOrbis has learned. Spot prices have increased by RMB 135/mt ($21/mt) over the weekend to RMB 4,653/mt ($714/mt) ex-warehouse on average on March 22. Prices include 13 percent VAT.
The latest deal for 30,000 mt of ex-Malaysia 3SP billet to China has been confirmed at $575/mt FOB, with the freight assessed at $35-37/mt to the main ports and at $40/mt to the Yangtze River area, and so the final price is about $610-615/mt CFR. The deal was done on Friday, sources have said. This deal is at least $15/mt above the previous transaction from Malaysia done a week ago.
Apart from this, a large cargo of Indonesian 3SP billet was sold at “slightly below $610/mt CFR,” an international trader said. The deal is estimated to have been done in the second half of last week.
Taking into account the recent local price increase in China by $20/mt, import prices should improve further, most market sources believe. With the current local prices, the tradable value for ex-ASEAN billet to China is assessed at $625/mt CFR or even higher, SteelOrbis has learned. “Most offers were $610-615/mt CFR [last week], but now suppliers will ask $15/mt higher,” a local trader said.
Non-ASEAN billet, which is subject to two percent import duty, is expected to be acceptable for Chinese buyers at $610-615/mt CFR, versus $595-600/mt CFR last week.
Last week, an Iranian producer closed a tender for 30,000 mt of steel billet at $550/mt FOB BIK for April shipment, with the targeted sales destination to be China. The price level is estimated at below $600/mt on CFR basis, taking into account freight and some additional costs.