The continuous rapid declines in the local billet and rebar markets in China have continued to put pressure on import billet prices. The tradable value of billet to China has fallen to below $700/mt CFR, causing exporters to turn to other markets.
The sharp fall in rebar demand and prices has hit the billet market in China, where the highest bids have been reported at $680-690/mt CFR. “This is based on domestic prices in China. Demand has gone,” a trader said. According to some sources, firm bids from buyers have fallen to as low as $640-650/mt CFR today, reflecting fears of possible further declines in the market. “Very little real action now,” another trader said.
Last week, deal prices for ex-ASEAN billet reached $790-800/mt CFR. After that, an ex-Ukraine deal was rumored at $785-790/mt CFR, though this remained unconfirmed by the seller. The last deal heard to China was from Turkey at around $750/mt CFR or slightly above, but it was late last week before the downtrend gathered momentum.
The latest fresh offers from ASEAN to China have been at $730/mt CFR. Most exporters have stopped offering to China after bids fell below $700/mt CFR and redirected their attention to Southeast Asia or Turkey.
Steel mills in China have dropped their billet prices in the local market by another RMB 150/mt ($23/mt) today, May 20, to RMB 5,150/mt ($799/mt) ex-works. This translates to $707/mt, excluding 13 percent VAT.
Following a more than five percent drop in China’s rebar futures yesterday, they have lost 4.74 percent today, coming to RMB 5,186/mt ($804.5/mt). Spot trading in the Chinese rebar market has been weak as rainy weather has dampen construction and spot rebar prices have lost RMB 250/mt ($39/mt) today to RMB 5,367/mt ($833/mt) ex-warehouse on average, according to SteelOrbis’ data.
$1 = RMB 6.4464