Stronger demand has pushed up local rebar prices in China and, as a result, market sources have said that Chinese traders will be able to accept higher import billet prices, which will support the overall market in Asia.
Average rebar spot prices in China have increased by RMB 83/mt ($11.8/mt) today, Wednesday, November 20, to RMB 4,273/mt ($609.6/mt) ex-warehouse, according to SteelOrbis’ data, reflecting stronger demand in the eastern and southern parts of the country. The highest price hike has been seen in eastern China: in Shanghai prices have surged by RMB 120/mt ($17/mt) compared to Tuesday. In the northern part of the country, the increase has been much slower: quotations in Beijing have added RMB 30/mt ($4.3/mt) today, and mills from the north have been redirecting some tonnages to the east and south, seeing better demand there.
The uptrend in the rebar segment has supported billet prices in China. The average quotations have increased by RMB 12/mt ($2/mt) over the day to RMB 3,525/mt ($503/mt) ex-warehouse, while the week-on-week increase has totalled RMB 80/mt ($11.4/mt).
At the same time, offers for imported billet have also increased, by $10/mt to $420-430/mt CFR China. Most sources said that traders are not ready to accept the hike yet and those who purchased at $415/mt CFR last week have been bidding at $410-415/mt CFR this week. But there are expectations that the higher import prices will be accepted soon following the further increase in the local market, market sources believe.
Comparing import offers ($425/mt CFR) and the average local billet prices, including the tax for imports and 13 percent VAT, the difference is about $11/mt, but in comparison with the domestic prices in eastern China, imported billet is about $25-30/mt cheaper than the local product.