One major Indian billet exporter has reportedly sold two cargoes to China at a higher price level. And though this has been confirmed from the seller’s side, most Chinese customers have been cautious in purchases and have been voicing mainly lower bids. The market trend will depend on domestic prices in China and the futures price trend in the next one to two weeks.
Sources said that two lots for 60,000 mt of billet in total from India have been sold to China at around $420-425/mt CFR, which translates to $400-405/mt FOB. The previous tradable price levels were at $412-419/mt CFR, as SteelOrbis reported last week. Though there has been no information about when the deals were done, sources said they must have been done late last week as early this week bids have been going down, reflecting some weakening of the local market. “Some enquiries were at $420/mt CFR late last week. But over the past two days, China is not buying and is just checking the situation,” a source said.
Since Friday, rebar futures prices have lost RMB 23/mt ($3.3/mt), closing at RMB 3,724/mt today, Tuesday, July 28. Average billet prices in the Chinese spot market have declined by RMB 13/mt ($1.9/mt) today to RMB 3,425/mt ($491/mt), according to SteelOrbis.
“The Indian price idea is $425/mt CFR, but it is not workable for China,” one Chinese trader said. Another source mentioned that bids for Indian billet should be below $420/mt CFR from the majority of buyers. “A trader was bidding $424/mt CFR to Vietnam [this translates to $416/mt CFR for Indian billet, which is subject for 2 percent import duty],” a source told SteelOrbis.