According to sources, bullish sentiment in China, supported by the sharp hike in futures and iron ore prices, has led to new deals for imported billet at higher price levels in China and rising offers. Moreover, a price increase has also been registered in Southeast Asia.
A contract for 30,000 mt of ex-Vietnam billet has been signed at $432/mt CFR China, which indicates $10/mt increase compared to the previous contract for billet of the same origin early last week. This new deal price level translates to $424/mt CFR for non-Southeast Asian billet with two percent import duty.
Offers for Indian billet have already increased to $435/mt CFR China, versus the previous deal price level at $420-422/mt CFR.
Rebar futures at Shanghai Futures Exchange have continued to go up on Tuesday, August 4, though at a slower pace than on Monday, reflecting the positive outlook in the local Chinese market. Since Friday, rebar futures have added RMB 63/mt ($9/mt), reaching RMB 3,840/mt ($550/mt).
The situation in China has boosted the Southeast Asian market. A contract for Iranian billet has been done at $415/mt CFR in Thailand after some pause in purchases. In the second half of July, offers for Iranian billet were at $410/mt CFR or slightly below.
Deal prices for non-Iranian billet in Southeast Asia will also rise soon, sources believe. Last week, the workable price for Indian billet was at $420-422/mt CFR Manila, but this week most offers are above $425/mt CFR.