By the end of this week, the sentiment in China’s import billet market has become more bearish again due to the weakening of the rebar market, the spread of Covid-19, and rising freight rates.
Most bids for import billet have been heard at $690/mt CFR on Friday, down from deals at $700-710/mt CFR done by Wednesday this week. Lower bids have been due on the one hand with the unstable situation in the rebar market and the decline in futures prices. As of today, August 13, rebar futures at the Shanghai Future Exchange closed at RMB 5,482/mt ($846/mt), down by 0.9 percent or RMB 49/mt ($7.6/mt) on the day. But on the other hand, traders have been citing transportation issues among the main factors limiting billet imports. According to the new rules, all ships entering China will have to wait for 14 to 21 days due to the new quarantine requirements for vessels, and this is leading to rising queues at ports and increasing charges.
Despite the abovementioned issues, the latest tender from an Indian state-owned company for 30,000 mt of 150 mm billet was closed at $625/mt FOB, with the trader expecting to sell this material to China later. “This price seems quite aggressive, considering $75-80/mt freight,” a trader said. “This FOB price would be $705/mt CFR for China, too high for now, but let’s see,” another source said, adding that, even despite the current increased freight and charges for waiting to enter Chinese ports, some market sources are still expecting more healthy conditions in China in September-October, which will help to absorb costs.
Local billet prices in Tangshan have softened today by RMB 20/mt ($3/mt) to RMB 5,090/mt ($785.5/mt) ex-works, which corresponds to $695/mt, excluding 13 percent VAT.
$1 = RMB 6.4799