Sentiment in the Chinese billet market has improved on April 5, the first day after the holidays, amid the easing of Covid-19 restrictions and improved transportation locally. Nevertheless, billet imports are unlikely to revive due to still low bids and trading is limited to rare deals for ex-Russia material at discounts.
The local average billet price in China has increased by RMB 27/mt ($4/mt) since the last working day on Friday, April 29, to RMB 4,885/mt ex-warehouse, which corresponds to $658/mt, excluding 13 percent VAT. Starting from Sunday, severe lockdown restrictions in Shanghai, implemented since March, have started to ease amid a lower number of new infections, though controls are still strict in Beijing. Many construction steel projects are coming back to life, while resumed transportation has supported demand as well.
However, the market is still far from being strongly optimistic as overall prices in China are still at very low levels and as a result billet imports have remained limited. The latest deal was reported at $650/mt CFR China for ex-Russia billet, done last week. But a number of sources believe that very few traders may decide to buy at this level, saying it should be at least $20-30/mt lower. “The payment issue is still very tough even if someone would like to re-export this,” a trader said.
The SteelOrbis reference price for imported billet in China has remained at $650-660/mt CFR for now, stable from last week.