Though the tradable prices for imported billets were going up last week in tandem with local price rises, the sharp fall in the local market in China at the weekend and the negative outlook for the near future due to heavy rainfall have turned sentiments mostly bearish again. As a result, import billet activity has remained poor as suppliers have been much more optimistic, increasing offers, than buyers, as SteelOrbis has learned from the market.
The latest prices for ex-Russia billets to China have been reported at $560/mt CFR, up from the previous level of $550/mt CFR and below. “There are not many firm offers in the market, but suppliers are surely aiming for an increase,” a source from China said. For some other Asian destinations like Taiwan and Southeast Asia, some ex-Russia offers have already been reported at even higher levels - at $570-580/mt CFR.
“The market is under strong pressure, but in the following month the demand recovery will be much better than now. For the domestic market, prices at $530-540/mt CFR will be appropriate,” a Chinese trader said. Another market source said he believed that $540/mt CFR is the highest possible price in the current market conditions, adding that for the coming weeks prices may fluctuate and move down in China.
One more source from China said that the current increase in offer prices may be temporary as real bids are lower in China, at $510-520/mt CFR, in particular in the northern part of the country due to lower local prices there than in some other regions. Moreover, heavy rainfall is expected in central and southern China this week after the typhoon at the weekend.
The SteelOrbis reference price for imported billet in China has been settled at $530-540/mt CFR, up by $10/mt from last week.
The local average billet price in China is at RMB 4,045/mt ex-warehouse on July 5, according to SteelOrbis’ data, translating to $534/mt excluding 13 percent VAT. The price level is down RMB 50/mt ($7.5/mt) over the past week.