The import billet prices in China have shown a visible decline on Friday, September 24, offsetting gains seen earlier this week after China returned from holiday. This has been connected with the slump in rebar futures and weaker expectations for demand in China.
Local billet prices in Tangshan have lost RMB 60/mt ($9/mt) over a day, coming to RMB 5,170/mt ($800/mt) ex-works, which translates to $708/mt, excluding 13 percent VAT. In such conditions, the highest bids for import billet have fallen to $695-705/mt CFR, which is $10-15/mt on average below the level seen a day earlier. “Actually I don’t see bids now, large traders probably will take a step back,” a source said.
As of September 24, rebar futures at the Shanghai Futures Exchange dropped to RMB 5,468/mt ($846/mt), decreasing by 2.8 percent compared to the previous trading day.
This means that even despite some rebound seen earlier this week, the tradable level for import billet in China has been settled at $700/mt CFR today, lower than $705/mt CFR late last week.
The outlook for the next week is mixed. On the one hand, some market participants believe that China will continue import billet purchases amid lasting crude steel production restrictions. The concern is how active the customers will be. Some market sources believe that after some pause, importers will return to the market, which may support prices to some extent. But on the other side, there are some worsening expectations regarding long steel demand in China. “Futures [fluctuations] impact trade [of billet]. Let’s see how the rebar market goes,” a trader said.
