The tradable price level for import billet in China has hit and exceeded $500/mt CFR, following gains in the local market and better expectations. Moreover, traders have started to book billet from abroad in positions, signalling expectations for further hikes in prices and the resumption of demand for imported billet, SteelOrbis has learned on August 3.
SteelOrbis’ tradable level for imported billet in China has settled at SteelOrbis at $500-510/mt CFR at the moment, up by $10-20/mt from late last week. “I believe $510/mt CFR is possible now, but there is still limited demand,” a trader said. “Buyers are still cautious as regards purchasing at prices similar to local prices,” another source said.
However, it seems that soon import of billets to China may resume as traders have already started to take positions for future sales. In particular, one of the major Iranian mills has managed to close a 30,000 mt billet tender at $460/mt FOB with the sales destination said to be China. Adding the freight to China, this price translates to $520/mt CFR. “I think this is a long position. Because I don’t think it can be sold today to China,” an international trader said. A Chinese trader has also agreed that this level is too high for now, but traders are seeking to buy.
There has been a lack of offers for billet from Russia’s Far East region to China lately as suppliers have been facing problems with shipments of already signed contracts and they believe that prices will go up further. The indicative level for ex-Russia billets has been reported at $520/mt CFR to China and Taiwan, versus $510-520/mt CFR heard last week. The import billet market in Taiwan “is very quiet as rebar sales are bad since scrap prices are still falling,” the representative of a local mill in Taiwan said.
The average local billet price in China has reached RMB 3,870/mt ex-warehouse on August 3, up RMB 190/mt ($28/mt) over the past week. This level translates to $505/mt, excluding 13 percent VAT.