Prices for import billet have continued to go up today, September 7, hitting and exceeding $700/mt CFR amid firm demand from Chinese traders as they have seen shorter supply locally and expect the trend to persist due to the government announcement that production curbs will continue up to mid-March 2022.
Ex-ASEAN billet has still been in demand in China with a Vietnamese BF-based producer managing to sell an additional 10,000 mt at $700-705/mt CFR, following a contract for 20,000 mt at $695/mt CFR a day earlier. Also, ex-Indonesia billet has been traded at $700/mt CFR on average early this week, though the final tonnage has not been disclosed by the time of publication, while most sources agree that the seller would target 30,000 mt.
In total, 40,000-50,000 mt of 150 mm ex-Russia billet were sold to China at $700/mt CFR yesterday, with the material to be shipped from Russian Far East ports. Other CIS-based producers have also been targeting China and the only issues have been high freight rates and congestion at Chinese ports. The freight costs from Black Sea to China have been varying from $85-90/mt to $100/mt, depending on the volume, the port of arrival and offloading features. Most suppliers from the Black Sea region are targeting not less than $610/mt FOB, though last week the reference price was $600-605/mt FOB.
In addition, a contract from the Middle East has been also rumoured at $695/mt CFR, but it was done on Friday or Monday, sources have said.
Yesterday, Indian state-owned producer RINL closed a tender for 30,000 mt of 150 mm billet at $591/mt FOB with 100 percent advance payment. This is in line with the tender price of the same mill late last week. The buyer is a company from the UAE, a number of sources said. But the price has been assessed as being too high for this market, as local billet prices are at $625-630/mt ex-works/CPT with no demand. As a result, “there is a big possibility of diverting this cargo to the Far East market, if the domestic market does not support the prices,” a local source said. Relatively low price levels in the recent tenders are due to the 100 percent advanced payment need, while most other suppliers from India have started to target prices much above $600/mt FOB. In particular, SAIL held a tender today, and, though the final price could not be confirmed by the time of publication, the producer’s target was $620/mt FOB at least. Market sources are not sure how successful the seller was as the offer was for 125 mm billet, which is not so popular in China, while in the Philippines bids are not increasing so rapidly.
Local billet prices from mills in Tangshan have increased further today - by RMB 20/mt ($3/mt) to RMB 5,120/mt ($793/mt) ex-works. This corresponds to $702/mt, excluding 13 percent VAT, so some buyers are already considering $700/mt CFR as a tradable level for import billet. Rebar futures at Shanghai Futures exchange have added RMB 67/mt ($10.4/mt) today, reaching RMB 5,494/mt ($851/mt).
$1 = RMB 6.4533