The sharp increase in rebar futures prices in China and supply concerns have pushed import billet prices up further in China. A number of new deals have already been done at above $700/mt CFR, SteelOrbis has learned.
A contract for 20,000 mt of ex-Vietnam BF billet has been signed at $705-707/mt CFR China recently. In addition, Indonesia-based Dexin Steel has sold 20,000 mt to China and 5,000 mt to Taiwan at $705/mt CFR. Also, an exporter from Russia’s Far East region has traded at slightly less than 20,000 mt billet to China at $707/mt CFR.
The new deals have shown price increases of $7-10/mt from contracts for ex-ASEAN billet at $695-700/mt CFR late last week.
After that, most offers have increased to at least $710/mt CFR China. Market sources are watching the situation in Vietnam as today news has emerged that Vietnam will impose a five percent export tax on steel billets. Since Hoa Phat and some other suppliers have been fairly active in export sales lately, this move may push prices further up. The tax increase will not impact recently booked contracts, source believe, but may be reflected in the next offers.
Billet prices in Tangshan have increased by RMB 20/mt ($3/mt) to RMB 5,120/mt ($790/mt) ex-works, which corresponds to $699/mt, excluding 13 percent VAT. And though this level is lower than the recent import bookings, market sources agree that lower production in China will boost local prices further in the near future. The positive mood has been reflected in today’s sharp increase in futures prices. Rebar futures at Shanghai Futures Exchange have added RMB 155/mt ($24/mt) or 2.9 percent to RMB 5,580/mt ($861/mt).
$1 = RMB 6.4806