- China's import billet market has been in the spotlight in the global arena this week with plenty of deals done from different neighbouring and distant suppliers. Deal prices have surged by $30/mt from $690/mt CFR at the highest last Friday to $720/mt CFR by the end of this week.
- Checks at steel mills in Jiangsu started on September 8 and the producers there will have to cut utilization rates to not above 50 percent in September-October to lower emissions and reduce energy consumption. “There is a rumour that Shagang and other steel mills in Jiangsu Province were told by the central government to cut production in September by 60-70 percent,” a trading source said, though no official announcement has been made.
- Moreover, the Chinese government has announced that it will prolong steel production cuts up to mid-March, 2022, aiming to combat environmental pollution during the winter heating season and in the lead-up to the Beijing Winter Olympics 2022.
- CIS billet suppliers have been interested in sales to China. 80,000-10,000 mt of billet were traded from Russia’s Far East region during the past week at $700-720/mt CFR. And at least one cargo of 50,000 mt from Ukraine was sold to China in the middle of the week at $705/mt CFR. With the support of the Chinese market, the reference price for Black Sea origin billet reached $607.5/mt FOB on average or $595-620/mt FOB on September 10.
- Almost 100,000 mt of billets from the Middle East have been sold to China this week with the latest contract level at $715/mt CFR.
- Indian steelmaker RINL closed two tenders at $591/mt FOB and $622/mt FOB this week, reflecting the strong buying indications in China.
- An Iran-based steel billet supplier closed its tender for 20,000 mt of steel billet at $629/mt FOB, targeting China. Though prices have increased and Iranian mills have some freight cost advantage compared to other sellers to China, overall export volumes from Iran have still been limited.
- Today different mills started to offer at $730/mt CFR China as optimism is observed for next week and rebar futures prices have been showing a further increase.
- Billet imports have revived slightly in Turkey, although the workable levels have remained low - $100/mt below the level in China. Accordingly, Turkish buyers, which have been delaying purchases for a while now, may not get their needed allocation even if they are ready to pay higher levels. One deal has reportedly been closed at $620/mt CFR Iskendenderun, while one seller has traded a total of 12,000 mt at $612/mt CFR northern Turkey and $617/mt CFR Izmir.