The local Chinese billet market has posted further price losses over the past week amid still slow demand despite expectations that it may revive once the Covid-19 restrictions are fully lifted. Lower local quotations have pushed bids for imported billet down further with mainly ex-Russia material being under negotiation.
The local average billet price in China has decreased by RMB 85/mt ($13/mt) since Friday and is down RMB 83/mt over the past week to RMB 4,700/mt ex-warehouse, which corresponds to $620/mt, excluding 13 percent VAT, according to SteelOrbis’ data.
The latest offers for ex-Russia 3SP billet to China have been at $620-630/mt CFR, but the tradable level has fallen further to $600/mt CFR and below. First of all, customers are not ready to take risks in the falling market and some traders have been re-exporting Russian billets to other Asian buyers. Also, demand in the local market needs to improve further before making purchases for June-July shipment, which is usually the slow season for construction. In addition, some traders claim there are some negotiations for ex-Russia slabs at $590/mt CFR China already, and so they are expecting lower billet offers as well.
As a result, the SteelOrbis reference price for imported billet to China has lost $20/mt over the past week to $600/mt CFR.
Russian suppliers have continued to cut prices for Southeast Asian customers. One deal for ex-Russia 3SP billet has been heard at $640/mt CFR Indonesia, down by $25/mt from the previous contract to the same country, but this could not be confirmed by the time of publication.
$1 = RMB 6.7134