A few deals for importers have been signed by Chinese customers at higher prices recently. This had a positive impact on sentiments in the Asia market, as demand from China may support the overall price trend in the region. But on Thursday, rebar futures in China have posted visible decline, hitting moods in the import billet segment.
Ex-Vietnam integrated steel mill has sold 20,000 mt of equivalent to 5sp billet at $433/mt FOB, which translates to around $443/mt on CFR basis, sources have told SteelOrbis. In the previous round of purchases ex-Vietnam billet has changed hands at $435/mt CFR China.
This meant that the new workable level for non-Southeast Asian billet, which is the subject for 2 percent duty in China, has been settled at $434-435/mt CFR, higher than earlier when customers have been rejecting $430/mt CFR, but it has been still below the majority of offers, which are at around $440/mt CFR at the moment.
A 60,000 mt deal from another major Vietnamese producer has been rumored at $442/mt FOB to China, but the exporter has denied that it has been done. This price level is “impossible and can be reached, only if it is a higher grade billet,” a Chinese trading source said.
According to reports in the market, the latest contract for limited volume of Indian billet has been at $435-440/mt CFR, but “it is hard to imagine who can offer at this level now. None of the big mills are keen to offer now,” an international trader said. Rare offers of Indian billet to both China and Southeast Asia have been reported at $440-445/mt CFR.
Early this week there has been a rumor about ex-Iran billet sale at $427/mt CFR, but most sources have assessed this level at too low as for now and said that it should be $430/mt CFR China minimum.
Despite improvement in import billet buying this week in China, sentiment has not been very good by the end of the week. Rebar futures at Shanghai Future Exchange have closed at RMB 3,765/mt, down by RMB 59/mt ($8.5/mt) over the day. Domestic billet prices in Tangshan and average rebar price in China have lowered by RMB 10/mt on Thursday because of the pressure of high supply and more cautious buying.
