The local billet market in China has declined over the past week, especially from last Friday, following decreases seen in the rebar segment and in futures prices. This has resulted in lower offers for imported billet too, but import trading has come to a complete halt due to buyers’ very low price ideas or the absence of any bids at all, SteelOrbis has learned from the market.
The average billet price in the local Chinese market has come to RMB 3,925/mt ex-warehouse on July 12, down RMB 120/mt ($18/mt) over the past week and down RMB 93/mt ($14/mt) since Friday. This level translates to $516/mt, excluding 13 percent VAT.
In such conditions, the tradable level for imported billet in China has slipped to $510-520/mt CFR, according to market sources, down from $530-540/mt CFR seen as the highest levels last week.
However, the real bids in China have been at much lower levels, depending on the region. “Local billet prices [in Hebei] are at about RMB 3,760/mt, equal to $495/mt CFR,” a trader said. The lowest level seen in the local market from mills in Tangshan at RMB 3,700/mt ex-works.
In the eastern part of China, the tradable level for imported billet has been higher - up to $520/mt CFR, but again not much action has been seen. “There is no demand at all. The market is frozen for now,” another source said, referring to the softening of rebar prices and lower consumption in the off-season.
At the same time, offers from foreign suppliers have also been coming down. There have been reports that a Russian supplier was in negotiations at $520/mt CFR in China, though no such official offers have been voiced. Last week, offers from Russia were at $560/mt CFR China, they have slipped to $540/mt CFR this week, though this level is said to be indicative, taking into account the constantly declining Chinese market.
Also, there are some reports that one supplier from Malaysia has cut offers to $550/mt CFR to Taiwan and Southeast Asia this week, while last week the lowest ex-ASEAN prices were at $570/mt CFR, fixed in at least one deal to Taiwan. Though this new level has not been finally confirmed by the time of publication while widely available in the market, this signals a definite fall in sentiment in Asia after the decline in China.
$1 = RMB 6.7246