The situation in China’s import billet market has not improved but on the contrary has even worsened this week due to the drop in futures and steel prices on November 1-2. Most bids are reported to be significantly below $650/mt CFR China. In such conditions, buyers in the rest of Asia are also being cautious in purchases.
The tradable price level in China’s import market has slipped by $10/mt since last week to $630-640/mt CFR. “I see $630/mt CFR as a possible price level,” a trader said, but some market sources believe that even at this level it will be hard to find a taker in the current conditions.
The billet price level from mills in Tangshan has remained at RMB 4,900/mt ($765/mt) ex-works, but it does not reflect the recent buying level in the market. The trades in Tangshan have been at RMB 4,700/mt ($733/mt) ex-warehouse, sources have said, which translates to $649/mt, excluding 13 percent VAT.
Even though rebar futures at Shanghai Futures Exchange posted some stabilization today, November 3, (the closing price was just RMB 3/mt below the level settled yesterday), the outlook in the Chinese market is still cautious. “For now [there is] no chance for imports,” a trader said.
In such a situation, traders have still been active in offering cargoes, redirected from China, to different outlets. There has been information in the market about the latest position cargo sold to Taiwan at $660/mt CFR, which is $10/mt below the deal for ex-Hoa Phat billet sold by a trader late last week to the same destination. Nevertheless, the origin of the material in the new transaction has not been disclosed with some sources saying it was ex-India billet and some saying ex-Indonesia. Initially, traders had been asking for $680/mt CFR in Taiwan, but they had to cut prices. Most mills have not been ready to cut prices so much. They have been offering at $680-700/mt CFR to Taiwan and to other Southeast Asian customers.
In the Philippines, the tradable levels are still $665-670/mt CFR, while in Indonesia the last ex-India position cargo was sold at $660/mt CFR, as SteelOrbis reported earlier.
$1 = RMB 6.4079