China’s billet market falls again, leaves almost no hope for imports

Wednesday, 27 October 2021 17:18:21 (GMT+3)   |   Istanbul

Local billet prices in China have slipped again today, following the sharp drop in rebar futures prices and the weak outlook for demand in the near future. As a result, the workable level for imported billet has become even lower in China, while bids from Southeast Asian importers have also gone down.

The local billet price in Tangshan has fallen by RMB 60/mt ($9.4/mt) to RMB 4,900/mt ($767/mt) ex-works, translating to $679/mt, excluding 13 percent VAT. This has followed a decline by 4.3 percent or RMB 208/mt ($33/mt) in rebar futures at Shanghai Futures Exchange, which closed at RMB 4,655/mt ($729/mt) on October 27.

The market has shown a further easing after some slight improvement a day earlier, as raw material futures have fallen again, sources have said, and overall sentiment is bad. “Because of the lack of coal and the limitation of power generation, demand from downstream companies has weakened. Now China will enter the winter. The projects from north China are very slow,” a mill source from China said.

While yesterday import billet bids were reported at $660/mt CFR, up by $10/mt from Friday, today prices have retreated. “It will be hard to find a bid at above $640-650/mt CFR,” a trading source said. Some sources reported about even lower levels.

A cargo redirected from China of ex-Indonesia 150mm billet is reported as sold to the Philippines at $690/mt CFR for November shipment, but today most buyers have started to bid lower. “Futures are down again today. I can't see any buyer paying above $675/mt CFR [in Southeast Asia] today,” a trader said.

The SteelOrbis reference price for imported billet in Southeast Asia has fallen to $675-690/mt CFR this week, down by $22.5/mt on average from last week and down $5/mt today.

$1 = RMB 6.3856

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