Chinese traders have been more interested in import billet purchases after the holidays as local prices have increased, opening opportunities for foreign sellers. However, demand has been mainly focused on billet from Southeast Asia, which is not subject to two percent duty in China. Prices for non-Southeast Asian billet are still too high for Chinese customers.
A cargo for 20,000-30,000 mt of Vietnamese BF billet has been sold at $435-437/mt FOB for December shipment recently, which translates to $445-447/mt CFR China. The deal price level is $8-10/mt above a contract for the same origin material signed during the holidays in early October. “Prices increased so fast because of demand [from China],” a source said, adding that the current offers from the major supplier from Vietnam are at $440/mt FOB.
Also, there is information in the market about two deals for ex-Indonesia BF billet at $445/mt CFR and $448/mt CFR, but the final destination of the material has not been confirmed by the time of publication. Some sources report that both contracts were to China, while others said that they were to Taiwan. After recent deals, offers for billet from Indonesia have increased to $455/mt CFR China minimum.
Prices for non-Southeast Asian billet have remained “not workable” [in China]. It is reasonable to buy from Vietnam or others [Southeast Asian countries],” a Chinese trader said. Offers for Russian billet have been heard at $450/mt CFR, while bids are still mainly below $440/mt CFR. Suppliers are unlikely to provide significant discounts in the near future, seeing improvement in sentiments in the market. “Buyers are still wishful. But they will have to pay higher sooner or later,” an international trader said.
In the local market in China, billet prices have risen continuously during the holidays and just after, but the trend has been showing a slowdown recently. Today, the local price level in Tangshan has added just RMB 10/mt ($1.5/mt) to RMB 3,420/mt ($508/mt) ex-works, with prices up RMB 80/mt ($12/mt) in total over the past week.