After a sharp slump in futures prices and a fall in demand for billet in China early this week, the market conditions in the import billet market have gradually started to improve. Negotiations have resumed and, though bids are much lower than last week, they are better than early in the week.
According to market sources, one deal for ex-India 150 mm billet produced by a private steel mill was signed at $690-695/mt CFR in the middle of this week, with the volume assessed at 25,000 mt. And though this could not be fully confirmed by the time of publication, a number of market sources said that these bids have in fact been heard and that this deal is quite possible in the current conditions. Earlier this week, bids were reported at as low as $660-680/mt CFR.
In addition, there have been rumours about negotiations for an ex-Vietnam BOF billet lot from the main Vietnamese producer at $700/mt CFR China. Some sources said that the deal was done yesterday, but no confirmation has been received from the buyers’ side by the time of publication. Offers from ASEAN suppliers have dropped to $705/710/mt CFR this week to attract some customers, while last week the highest deal price level reached $725-730/mt CFR. “Most bids are below $700/mt CFR, but futures prices are up, so we should wait for next week for more buying,” an international trader said.
Steel billet prices in Tangshan have been at RMB 5,130/mt ($793/mt) ex-works today, up by RMB 30/mt ($4.6/mt) from a day earlier, but RMB 110/mt ($17/mt) lower than the price level seen a week ago, on July 29. The current price level in the local market translates to $702/mt if excluding 13 percent VAT.
As of today, Thursday, August 5, rebar futures at the Shanghai Futures Exchange are standing at RMB 5,373/mt ($831/mt), increasing for the second day in a row - by 0.26 percent from August 4. However, the level is down by RMB 380/mt ($59/mt) or 6.6 percent since July 29.
$1 = RMB 6.4691