Foreign billet suppliers have been insisting on higher prices in China, following gradual gains locally in China. Even though demand from China has not improved much, rare deals have been signed at higher levels. Customers in Taiwan have also come back to the market with inquiries, SteelOrbis has heard in the market.
The average local billet price in China has reached RMB 3,903/mt ex-warehouse, up by RMB 35/mt ($5/mt) over the past week and up RMB 55/mt ($8/mt) since last Friday. This level translates to $511/mt, excluding 13 percent VAT. Though the overall market improvement has been very cautious, Chinese mills have started to see some margins, and so they have been checking import billet prices.
SteelOrbis’ tradable level for imported billet in China has increased to $505-513/mt CFR on August 9, up by $5/mt from the lower end and by $3/mt from the higher end of the range compared to last week.
A contract for a small volume of 3,000-5,000 mt of ex-Japan 3SP EAF billet has been heard at $513/mt CFR early this week. The current price level has been assessed by market sources as being a bit high for the current market but “possible”, according to sources. Moreover, there has been information that the size of the billet was 130 mm, versus the most popular size in China which is 150 mm. An offer for an ex-Japan EAF billet was heard at $535/mt CFR on Tuesday.
Nevertheless, this is a sign that demand for imported billet in China is gradually coming back before the month of usually strong steel consumption in September.
As SteelOrbis reported late last week, a contract for 30,000 mt of ex-Iran billet was signed at $505/mt CFR and one more deal at the same level was discussed but was not confirmed by the time of publication. Some sources said that customers in China have been voicing firm bids at $500-505/mt CFR this week for 20,000-40,000 mt lots, seeing a bit more confidence in the market. “Many mills may consider buying at $500/mt CFR, as it is not loss-making like before,” a trader said. The price of $500/mt CFR was also fixed in a deal for an ex-Iran billet to Indonesia last week.
In late July, ex-Russia billet was being negotiated to China at $500/mt CFR, while this week offers for ex-Russia billet have reached $510-515/mt CFR China. In early August, the target level of Russian exports was $520/mt CFR, which has been corrected slightly, as the market has been not showing strong demand and fundamentals, at least so far.
Moreover, Russian sellers have been offering for September shipment at $515/mt CFR to Thailand and Taiwan recently. In late July, 40,000 mt of ex-Russia Ear East were traded to Taiwan at $500/mt CFR.
$1 = RMB 6.7584