Following the strong rebound in futures prices on November 11, the Chinese rebar market has shown weakness today again. As a result, local billet prices in China have ended the week at a very low level, pushing the tradable import level significantly below $600/mt CFR.
Mills in Tangshan have cut their billet prices by RMB 160/mt ($25/mt) today to RMB 4,290/mt ($670/mt) ex-works, which translates to $593/mt, excluding 13 percent VAT. This followed a 2.3 percent or RMB 100/mt ($16/mt) fall in rebar futures at Shanghai Futures Exchange.
In such conditions, the possibilities of a resumption of billet imports have been postponed again. The tradable level for import billet in China has slipped to $585/mt CFR as the best, down by $50/mt over the past week and $25-30/mt from early this week.
“China is struggling with low rebar demand,” a trader said, adding that all sellers will target SE Asia and other markets in the near future as the outlook is still weak.
Two Indian mills have opened tenders for billet exports late this week - for 150 mm, 125 mm and 90 mm. But to attract customers, the sellers will have to cut offers (which were at $600-610/mt FOB) to below $590/mt FOB, market sources believe. “I hear 10,000 mt of an Indian position [from a trader, bought from Indian mill much earlier] was closed at $630/mt CFR,” a source said regarding the lowest price he saw in the Southeast Asian market this week.
$1 = RMB 6.4065