China’s awaited return after its holiday has shaken the import billet market. Local billet price rises have led to an increase by as much as $25-30/mt in import prices, which now exceed $700/mt CFR, SteelOrbis has learned from market sources on May 6.
Steel mills in Tangshan have increased their billet prices by RMB 140/mt ($21.6/mt) compared to last week to RMB 5,130/mt ($790.5/mt) ex-works, including 13 percent VAT. If excluding VAT, this price level corresponds to about $700/mt.
Such a rise in the local market has made the import market very active. Bids were heard at $700/mt CFR in the morning today. Large traders have been trying to get material from foreign suppliers at $705/mt CFR during the day. According to SteelOrbis’ information, a deal for ex-CIS billet has been finalized at $710/mt CFR today. “Mills want $720/mt CFR, it’s insanity,” a source said. As a result, the SteelOrbis reference price for import billet in China has been increased from $680/mt CFR on average late last week to $705-710/mt CFR.
Some suppliers from Southeast Asia have announced billet offers at up to $720-730/mt CFR China. Producers from the CIS, Turkey and the Middle East have been cautious in giving firm offers, waiting for the market to improve even more. The target of CIS-based sellers from the Black Sea region would be not below $650/mt FOB in the current conditions, sources have said. With freight at above $60/mt, this price translates to $710-720/mt CFR. The target price level form Turkey has been heard at $655/mt FOB.
The steel production restrictions in northern China are unlikely to be eased after June, market sources said, which is likely to support billet prices, and have made customers confident in securing import material.
Rebar futures at the Shanghai Futures Exchange have surged by 4.56 percent compared to the previous trading day (April 30) to RMB 5,665/mt ($873/mt) on May 6.
$1 = RMB 6.4895