The situation in the import billet market in China has worsened further by the middle of this week. And though some suppliers managed to secure some sales earlier this week just slightly below $700/mt CFR, at the moment bids have fallen further and the outlook for the near future is bearish.
Early this week, a deal for 20,000 mt of ex-Vietnam BOF billet was done at $660/mt FOB to China, corresponding to $690/mt CFR or slightly above. And though the price level is lower than $703/mt CFR seen in the previous deal from the same suppliers a week ago, for now it has already become unworkable in China. “Today, this is expensive. The market is very weak, and China is in freefall,” one billet exporter said.
As of today, Wednesday, August 18, buyers’ price idea for imported billet in China has been standing at $660-670/mt CFR. Offers from major suppliers have been reported at $685-695/mt CFR, but even offering $680/mt CFR there has been no response from the big buyers in China. “Prices may go down to $650/mt CFR [in the near future],” a Chinese trader commented.
Local billet prices in Tangshan have declined by RMB 60/mt ($9.2/mt) today to RMB 4,980/mt ($767/mt) ex-works, corresponding to $679/mt, excluding 13 percent VAT.
The billet market in China has been falling, reacting to the slowdown in demand for rebar in the country and falling futures prices, which have been signalling a weak consumption outlook for the coming month even despite production cuts. Rebar futures at Shanghai Futures Exchange have slumped by RMB 198/mt ($30.5/mt) today, closing at RMB 5,144/mt ($792/mt).
$1 = RMB 6.4915