Following the resumption of import buying activity late last week in China, sentiment has worsened again as rebar prices have been gradually going down and local billet demand has been showing signs of weakening.
On June 16, steel mills in Tangshan have cut their billet prices by RMB 80/mt ($12/mt) to RMB 4,940/mt ($771/mt) ex-works, which translates to $682/mt, excluding 13 percent VAT.
As a result, a number of Chinese sources said that the previous levels for import billet at $695-700/mt CFR are not workable now as “China’s local market can’t catch up with this price,” a major trader said. Early this week, some ASEAN suppliers increased offers up to $720/mt CFR, while traders were still ready to sell at $705-710/mt CFR, with no takers seen. “Even $700/mt CFR is too high for China now,” a source said.
The tradable level for import billet in China has been assessed by market sources at $675-680/mt CFR at the moment, down by $20/mt from late last week’s level of $695-700/mt CFR.
The main reason behind the recent weakening of sentiment was lower demand for billet due to the reduction in operations of re-rolling mills in the north of China and the seasonal decline in demand for rebar. The average rebar price in China has decreased by RMB 34/mt ($5/mt) today to RMB 5,093/mt ($795/mt) ex-warehouse, according to SteelOrbis.
$1 = RMB 6.4078