Posted on 01 Mar 2021
After several months of inactivity, China’s imports of billets picked up after the Chinese New Year (CNY) holiday over February 11-17, thanks to the widening price disparity between domestic semis and imports, and amid expectations of stronger demand, Mysteel Global noted.
Between the end of the CNY holiday on February 17 until February 22, Chinese steel traders booked more than 200,000 tonnes of billets from the Middle East, India, Indonesia, Vietnam, according to incomplete tracking undertaken by Mysteel.
The prices of the imported semis also increased, rising to $580/tonne CFR China from $565/t before the CNY holiday, according to Mysteel’s assessment.
“Domestic prices have kept rising, giving traders opportunities to bring billets in from overseas,” a steel exporter based in North China’s Hebei province observed.
Indeed, the strong optimism inside China that the revival of steel demand this year will come earlier and faster than usually after CNY has seen prices chart steep rises, with billet prices climbing to 9.5-year highs, Mysteel Global noted.
The Q235 150mm square billet price in East China’s Jiangsu province gained Yuan 290/tonne ($45/t) within six working days after the CNY holiday to reach Yuan 4,390/t EXW and including the 13% VAT as of February 25, the highest since September 2011, according to Mysteel data.
Most of the recent bookings are destined for East China and will ship in April when the country’s steel demand is expected to reach a peak. “Domestic buyers generally hold optimistic views on future demand," a Shanghai-based steel analyst commented. "With domestic prices continuing to strengthen, foreign billets may keep flowing in for the foreseeable future,” he maintained.
China was an active billet importer in 2020. Customs data shows that semis imports – including both billets and slabs – totalled 18.3 million tonnes, only slightly lower than the 20.2 million tonnes total of all finished steel last year. Last August, semis imports reached an all-time monthly high of 3.2 million tonnes.
“After some integrated mills in Jiangsu and Tianjin (North China) which used to supply billets to the markets were shut last year, the supply of billet has stayed tight, leading to the large volume of billet imports,” a steel analyst based in Hebei commented. But “ultimately, the volumes of foreign billet brought in will be decided by price disparities (between China and other countries),” he added.
Source:Mysteel Global
