Positive sentiment has prevailed in the Chinese market by the end of this week and import billet prices have increased further by Friday, with another deal signed at a higher price level.
Another 30,000 mt of ex-Vietnam 5SP billet have been booked by one of the largest Chinese traders at $668/mt FOB on the night of Thursday, July 9, with the freight assessed at $28/mt minimum and this price corresponding to $696/mt CFR. The previous transaction of the same producer was $11/mt lower earlier this week. “Buying in China is quite aggressive again,” a trader said, as fears of big crude steel production cuts in the second half of the year have persisted in the market.
There are rumours in the market that the new target of the Vietnamese seller is at $675/mt FOB and negotiations are ongoing, though some sources believe that even $690-700/mt CFR seems the overpriced level as for now. Steel mills in Tangshan have held local billet prices stable today at RMB 5,020/mt ($775/mt) ex-works, which corresponds to $686/mt, excluding 13 percent VAT. But traders believe that import prices have been supported by expectations that demand will persist next week and bids for import semis will be stronger.
Offers for IF billet, which is not popular in China, have also increased - by $10/mt to $670-675/mt CFR by the end of the week.
In addition, today one of the major Indian state-owned mills has closed a 30,000 mt billet tender, and, though the outcome has not been finally confirmed by market sources, today the company increased the allocation to 60,000 mt for export, with the targeted destination expected to be China.
$1 = RMB 6.4755