Import activity in the Chinese market has increased visibly this week with bids rising continuously and reaching almost the same high level seen earlier this year. Chinese customers have been interested in purchases of Southeast Asian origin billet and have bought up to 125,000 mt of it since last week. Acceleration of Chinese import billet market has been attracting CIS-based exporters, while they faced relatively low bids from the MENA region, sales to China will support FOB Black Sea prices.
The major Vietnamese BF-based producer has managed to sell 86,000 mt of billet to China at about $413/mt CFR and slightly below, according to sources it has been sold last week, while some insiders said that a part of volume has been definitely traded early this week. In addition, major Indonesian exporter has sold up to 40,000 mt of billet at $415-416/mt CFR also to China for August shipment. The deal has been done this week. This price level corresponds to $407-408/mt CFR for non-Southeast Asian billet, which is subject to two percent duty.
Also early this week there has been a sale of Indian billet at $407/mt CFR, though the tonnage has not been disclosed.
A cargo of 20,000 mt of Far East Russian billet has been traded at $405/mt CFR China early this week for September shipment, but at the moment offers have already spiked to $415-420/mt CFR owing to increasing bids. On Thursday, a number of sources reported bids for ex-CIS billet at $408-410/mt CFR China, which translates to $370/mt FOB Black Sea. Though there have been no reports about deals done yet, one of the sellers said that trades are there and some exporters are even refusing to sell at this price level, expecting Chinese demand to continue.
Sources report that CIS-based mills are checking the freight rates (according to recent information from shipping companies, freight from Black Sea to China increased to $40/mt) at the moment and evaluating the situation. But new deals will be disclosed to the market soon, most sources agreed, as CIS suppliers have been facing slower demand and low bids from Mediterranean countries. “They [CIS mills from Black Sea] are interested to sell, but the main question is how sustainable demand in China will be,” an Asian trader said. Offers from some CIS-based producers have been heard at up to $380/mt FOB.
SteelOrbis daily reference price for ex-CIS billet has increased from $360-365/mt FOB to $370/mt FOB.