Rebar futures have rebounded in China since late last week, providing support for local billet prices, which had posted rapid declines over the previous week. However, the recent gradual improvement in sentiments has not led to a revival of imports of billets, as bids are still low, market sources told SteelOrbis on June 28.
The average billet price in China has rebounded by RMB 75/mt ($11/mt) since last Friday, reaching RMB 4,095/mt ex-warehouse on June 28. This translates to $541/mt, excluding 13 percent VAT, according to SteelOrbis’ data. Though week on week the level has not changed much, sentiments have improved after prices hit the bottom last week and after futures rebounded.
As a result, the tradable level for imported billet in China is said to have increased to $515-525/mt CFR, up by $5/mt from late last week. While last week most bids from China were near $500/mt CFR, now this level could be higher, according to sources. “I think buyers will consider around $515/mt CFR,” a trader said, adding that the futures price increase was the main reason, but “I would not say that the sentiment is so good, as there is not so much [rebar] demand.”
There has been a lack of offers for ex-Russia billets to China. Since last week some suppliers have been ready to sell at $550/mt CFR to China, but this level is considered too high for both last and this week. Some market sources agree that the reasonable level for ex-Russia billet is $530/mt CFR, but, since there is not much interest from China, sellers are not active in giving firm offers at this level.
In terms of Russian billet, there has also been a rumour about a sale to the Philippines at $565/mt CFR from a Far East region-based Russian mill, but most Asian sources have denied this information, saying that the Philippines are not buying ex-Russian material due to the payment issues and that they will not risk purchasing at such a high level. For comparison, there has been talk that traders sold ex-ASEAN billets at $580-585/mt CFR Philippines last week. The gap between ex-Russia and ex-ASEAN origin billets has been much more than $20/mt in past weeks.