The uptrend in the import billet market in China has continued this week amid a surge in futures prices in China and this increase has been confirmed in deals. Though customers have still preferred ex-ASEAN billet, billet of other origins has also been in demand. Most market sources believe that China will continue billet imports, but further price changes will depend on futures prices.
According to market sources, a deal for 20,000 mt of ex-Vietnam billet has been done at $582/mt FOB or $600/mt CFR today, February 25. As SteelOrbis has learned, the freight rates from Vietnam to China have increased from about $10/mt to $18/mt. The latest contract price level is $20-25/mt above the previous bookings for Vietnamese and Indonesian billet last week. After the deal was done, the Vietnamese exporter has increased offers by $5/mt more to $587/mt FOB. Offers from other ASEAN countries have been coming to China not below $600/mt CFR recently.
Demand has also been seen for non-ASEAN billet in China, which is subject to 2.5 percent import duty, unlike imports from ASEAN countries. Early this week, a lot of Indian 150 mm billet changed hands at $575/mt CFR, while at the moment the target level of traders offering Indian billet would be at $580-585/mt CFR. Taking the recent ex-Vietnam contract at $600/mt CFR, Chinese customers may pay up to $585/mt CFR for non-ASEAN origin billet. “But we need to see which way futures will go, as they declined today in the afternoon,” a trader said.
On February 25, rebar futures at the Shanghai Futures Exchange reached RMB 4,686/mt ($726.5/mt), increasing by RMB 157/mt ($24/mt) or 3.47 percent since February 18, while rising by RMB 115/mt or 2.4 percent from yesterday.