Foreign billet suppliers have kept insisting on higher prices in China and Southeast Asia since last week, but buyers have been refusing to accept any significant hike, focusing on purchases of low-priced IF billets. In general, demand for imported billet in China has remained weak, taking into account still subdued longs buying and relatively stable local billet prices, SteelOrbis learned from the market on August 16.
According to sources, a deal for 40,000 mt of ex-Vietnam IF billet was done at $492/mt FOB last week with the sales destination said to be China. One source said that the freight for such a big volume, and as the shipment is very close, is expected to be $15/mt or even below, resulting in the CFR price translating to $507/mt at the highest. “It could be a ready cargo (or at least partially) that was intended for another market, but the buyer defaulted, so now it is diverted to China,” a trader said, explaining the close shipment date.
The SteelOrbis reference price for imported billet in China has settled at $505-515/mt CFR, changing only slightly from $505-513/mt CFR last week. Apart from that deal, no new bookings have been heard to China as suppliers have been asking in China a minimum of $525-530/mt CFR for ex-Iran and ex-Russia billets, though bids have been much lower. “We do not have much interest even at $510/mt CFR in China,” a large trader said. "I think $510/mt CFR is the tradable for now, but there are not many offers, the same as for bids," another source said.
Offers from other suppliers have been even higher. For instance, an offer for ex-Japan EAF billet was heard at $548/mt CFR China early this week, while ex-ASEAN mills have been targeting $550/mt CFR and above. Some ASEAN-based producers have even voiced $550/mt FOB in offers, which, of course, has been assessed as not being workable at all. In such a situation, Chinese importers have been focusing on negotiations for IF billets or waiting for cheaper offers from Iran and Russia, which are usually discounted.
The average local billet price in China is at RMB 3,908/mt ex-warehouse on August 16, which is up by just RMB 5/mt ($1/mt) from August 9 and down by RMB 12/mt ($2/mt) from the previous day. This price corresponds to $513/mt, excluding 13 percent VAT.
Not only have Chinese importers been choosing cheaper billet options, in the Philippines the last deal has been reported also for IF billets - according to some sources about 10,000 mt of ex-Thai billet were traded at $520/mt CFR last week, though the information could not be confirmed by the time of publication. The previous contract for IF billets done two weeks ago or more was at $510-515/mt CFR. “Most [ex-ASEAN EAF/BOF] offers are as high as $560-565/mt CFR Manila. Demand is somewhat sluggish even now, so buyers will prefer the cheaper IF billets,” a source said.