On Tuesday, April 27, billet prices in the local market in China showed signs of stabilization following rises on Monday. Nevertheless, market sources believe that import activity will remain firm in the near future amid still reduced supply in some parts of China, the continued strengthening of rebar futures, and higher raw material prices.
Offers for ex-ASEAN billet have reached a minimum of $680/mt CFR China early this week. One source has reported a deal for ex-Indonesia 5SP billet done at this price level on Monday, but this has not been confirmed by the time of publication and some sources said this price has not been accepted yet with bids at $675/mt CFR maximum. Nevertheless, most market sources agree that $680/mt CFR will be reached in China’s import market in the near future as demand is still seen.
Last week, contracts for ex-Malaysia and ex-Indonesia billet were done at $670/mt CFR and a few dollars above this level. For now, the tradable level is at $675-680/mt CFR, SteelOrbis has learned.
Trading has been active in the non-ASEAN billet segment too. In total, about 100,000 mt of ex-CIS and ex-Turkey billet, both from the Black Sea, were sold to China late last week and early this week. The final price in the deals is estimated at $655-660/mt CFR, taking into account different assessments of the freight rates.
Nevertheless, following the sharp increase in futures prices in China on Monday, the new target price level of suppliers has reached $670-675/mt CFR. Chinese customers are not ready to pay this price for now, but if the positive sentiment continues it may be possible in the future, according to sources. At the moment, the tradable price level for non-ASEAN billet is $660-665/mt CFR.
The target price for ex-Iran billet is $620/mt FOB, which could correspond to $660/mt CFR China.
Trading sources report firm demand for billet in China and stable enquiries for import semis. “Supply [in the local market] will not improve in the coming month, and so imports will continue,” a source said. The restrictions for sintering and BF operations are in place in Tangshan and Handan in Hebei Province. Steel mills in Tangshan have rolled over billet prices at RMB 4,980/mt ($767/mt) ex-works today, including 13 percent VAT, after a hike at the weekend. The prices of billet from stocks in Tangshan have been at above RMB 5,100/mt ($785/mt) ex-warehouse, according to SteelOrbis’ data.
Rebar futures at the Shanghai Futures Exchange have added RMB 29/mt ($4.5/mt) or 0.5 percent on April 27 compared to the previous working day, reaching RMB 5,411/mt ($833/mt).