Import billet prices up again in China amid local hike, output restrictions

Tuesday, 23 February 2021 17:42:22 (GMT+3)   |   Istanbul
       

Suppliers have continued to increase billet offers to customers in China after the latest bookings at higher prices last week and the ongoing uptrend in the local market. Production restrictions in Tangshan due to environmental reasons have supported the bullish sentiment.

Import offer prices of billet have risen to $590-600/mt CFR China this week from Vietnamese and Indonesian BF mills. A contract for around 20,000 mt of ex-Indonesia billet has been reported at $580/mt CFR or slightly higher, according to sources. The previous deals for 30,000 mt from Vietnam were at $575/mt CFR China, as SteelOrbis reported earlier. “The $580/mt CFR price level is ok compared to Tangshan local prices,” a local source said. “There are reasons for price growth [like production restrictions in Tangshan and high raw material prices], but speculation also exists,” another source said.

The tradable value for non-ASEAN billet has increased to $565-570/mt CFR China, according to sources. There have been rumours that a lot of Indian billet has changed hands at $560/mt CFR or so, but this has not been confirmed and most sellers believe it does not reflect the current market conditions any more.  

The Tangshan Q235 150 mm square billet price, the wind indicator of China’s steel market, has risen to a more than nine year-high of RMB 4,290/mt ($665/mt) ex-works, including 13 percent VAT on February 23, or up RMB 260/mt in total from February 10, the day before the Chinese New Year holiday.

As of 16:00 on February 19, Tangshan city started to implement a round of production curbs amid worsening air diffusion conditions and deteriorating air quality. The production curbs were expected to lower the supply of billet to the market and exerted a positive impact on billet prices.

Moreover, following the long holiday, market players have been optimistic as regards the future prospects for the market. At the same time, high production costs due to the high levels of iron ore prices and other raw material prices have also bolstered billet prices. Before the Chinese New Year holiday, some downstream users were unwilling to build up stocks of billet amid the high prices and uncertainties as regards the future market. After the holiday, market players rushed into the market amid bullish sentiments, thereby positively affecting prices.

$1 = RMB 6.4516


Tags: China Far East 

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