More negotiations for Chinese billets have been heard in the global market this week, while some deals to Southeast Asia and the GCC are even rumored to have been done. Though overall demand lacks strength, a number of buyers have been more interested in purchases, seeing the uptrend in China and the lack of cheap options.
The SteelOrbis reference price for ex-China billet has settled at $470-475/mt FOB, adding $2.5/mt from the previous day and up $7.5/mt since late last week. While earlier this week some negotiations at $465/mt FOB were heard, at the moment the tradable level is $470/mt FOB at the lowest. “However, this has already been a bid price. Offers from China are at about $475-480/mt FOB. They are not cheap,” a Chinese trader said.
The main reasons for the uptrend are better local demand and restocking ahead of the Labor Day holiday in China, higher raw material prices and the lack of big billet allocations for export. “While there is demand locally and China is still the best in terms of price globally, it is reasonable for prices to trend up,” a Singapore-based trader said. Rebar futures at Shanghai Futures Exchange posted a rather big increase on Monday this week, rising by 1.24 percent and they have been moving up slowly since then.
A sale of ex-China 5SP billet was heard at $497-498/mt CFR Manila earlier this week (improving from the previous tradable level at $485-490/mt CFR last week). This deal price level translates to nearly $470/mt FOB, but new offers for 5SP billet to the Philippines have already hit and exceeded $500/mt CFR. “Deals at above $500/mt CFR are not seen right now, but maybe within some time. Also, prices rose amid the change in freight rates, not just on FOB basis. Raw materials are also firmer, and billet availability is not so plentiful because mills are turning to slabs and HRC,” a Manila-based source said. The lowest offer for Chinese 3SP in Southeast Asia has been heard in Thailand at $495/mt CFR this week.
A large-volume deal for 40,000 mt of Chinese billet is rumoured to have been signed to Qatar, with the price estimated at $480/mt FOB. Though this could not be fully confirmed by the time of publication, market sources agree that this is in line with expectations as several mills in the GCC have been looking for import billet, trying to deal with problems with domestic HBI production caused by the war. The CFR price in this deal has been heard at near $530/mt CFR Oman, but, with the additional transportation by land, the final price for the buyer will be much higher.
Rumors about possible restrictions on Chinese semis exports have emerged today, April 22, though most market sources agree that it is too early to evaluate the situation, while a meeting will be held with major Chinese mills this week. The market research department of the China Iron and Steel Association has invited several steelmakers, including Baowu Steel, Ansteel, Shougang, HBIS, Shagang, CITIC Special Steel, Hunan Valin Steel, Baotou Steel and Rizhao Steel, to take part in a video conference scheduled for Friday, April 24. CISA will hold the video conference in order to assess the effectiveness of the steel export license implementation, understand the difficulties encountered by enterprises in their export operations, and solicit comments and suggestions on further optimizing relevant measures, as reported by local sources.
