Chinese companies have continued buying import billet after the holidays as they have managed to get prices lower than in the domestic market. Exporters from the Middle East and CIS have received inquiries, but deals have been heard for ex-Iran material recently.
About 100,000 mt of ex-Iran billet has been traded to China at $375/mt CFR, which is at least $10/mt below the previous transactions for billet of the same origin to China in the second half of September, SteelOrbis was informed. This price seems attractive for customers in China as local prices for billets have been relatively stable and even slightly up since mid-September. Comparing the recent deal for ex-Iran material including import duty and domestic prices excluding VAT, the difference will be about $40/mt, and so, even with additional transportation costs, this level was good for Chinese buyers.
The last deal for 20,000-40,000 mt of Omani origin billet has been closed at about $400-405/mt CFR, but two weeks ago. Market sources said that suppliers in the Middle East have been receiving inquiries from China with bids below $400/mt CFR this week.
CIS suppliers from the Black Sea, who have been trying not to drop prices further, may offer only above $400/mt CFR China.
Since production restrictions in Tangshan have been announced for October and iron ore prices are still fluctuating above $90/mt CFR, China may continue to be interested in billet imports.