Prices for imported billet have gone up further in China today, Monday, September 6, amid strict production cuts not alone in the September-October period, but now also expected to continue up to March 15, 2022.
A deal for 30,000 mt of ex-Vietnam 150 mm billet has been done at $695/mt CFR China today, market sources have told SteelOrbis. New offers from Vietnam have gone up to $710/mt CFR for November shipment. At least two other suppliers have also reported about bids from China at $695/mt CFR today.
On Friday, the tradable price level in China was at $690/mt CFR, with the sale of ex-Indonesia billet rumoured, while earlier last week 150 mm billets were sold at $685-687/mt CFR. This means that import billet prices have added $5/mt in deals over the weekend and $7-10/mt over the past week.
The higher import prices have followed gains in the local market. Local billet prices in Tangshan have increased by another RMB 40/mt ($6/mt) over the weekend, reaching RMB 5,100/mt ($790/mt) ex-works, translating to $699/mt, excluding 13 percent VAT.
The recent increase has been supported by news of more mills implementing production cuts in the September-October period, in Tangshan and Henan in Hebei Province, and in Jiangsu Province. Moreover, today there has been a fresh announcement from the Chinese authorities regarding steel production cuts continuing until March 15, 2022. “China will drive the [billet] market up to the end of this year,” an international trader said.
Rebar futures at Shanghai Futures Exchange have gained 1.7 percent or RMB 92/mt ($14/mt) since the previous trading day on Friday, September 3, closing at RMB 5,473/mt ($848/mt).
At the same time, billet suppliers have been more aggressive in Southeast Asia with offers coming at $695-705/mt CFR today. “Offers are higher, but local debar prices are low. Because China increased their buying, the Philippines should follow. But our country has nothing to do with China. Our demand is down, while China's reason for higher prices is they're cutting production of billets,” a local trader from Manila commented. According to sources, the tradable level for 120-130 mm billet to the Philippines would now be at $680-690/mt CFR, versus $670-675/mt CFR last week, mainly because of the uptrend in China rather than because of demand.
$1 = RMB 6.4529