The billet import market in China has remained at a standstill as the gap between offers and bids has reached $100/mt or more, and this is happening even despite some increases seen in the local billet market. Instead of imports, Chinese traders are now evaluating the possibilities of billet exports, SteelOrbis has learned.
The average ex-warehouse billet price in China has increased to RMB 4,863/mt today, March 9, up by RMB 133/mt ($21/mt) over the week, but down by RMB 22/mt ($3.5/mt) from the previous day. This level corresponds to $681/mt, excluding 13 percent VAT. Though some rise has been seen compared to last week, in the past few days sentiment has not been very good and mills in Tangshan have lowered their prices by RMB 50/mt ($8/mt) in the last two days to RMB 4,760/mt ex-works or $666/mt without VAT.
In such conditions, the highest tradable level for imported billet in China is at $690/mt CFR (based on domestic prices in Jiangsu), while the general price in China is hardly above $660-680/mt CFR.
The SteelOrbis reference price for imported billet in China is at $660-690/mt CFR, up by $20/mt on average over the past week.
But in comparison to offers, these buyers’ price ideas are far from possible to get. For instance, among the lowest offers there was a price for ex-Japan billet at $780/mt CFR and “customers could not accept it,” a trader said. “The import billet market in China is nonexistent at the moment,” another source said. According to market players, some offers for ex-ASEAN billet have already been reported at definitely above $800/mt CFR.
At the same time, there have been talks about the possible resumption of billet exports from China, if billet prices keep going up. “It is possible that Chinese billet returns,” a Chinese source said, adding that acceptable prices in Southeast Asia should go up more.
“I don’t think China is ready to export steel billets, it is extremely frowned upon and, given the great alertness of policy makers in China, I doubt these mills want to test the patience of the CCP. However, can’t rule out aggressive moves of Chinese mills, in export market in particular. For now, exports do not exist, in my view,” a Singapore-based international trader said.
At the moment, the possible export price for ex-China billet (declared at square bar) is at $750/mt FOB on average, according to SteelOrbis’ data.