Posted on 26 Mar 2021
Chinese billet import purchasing has resumed amid the run-up in China’s domestic market, Kallanish notes.
Last week, Vietnamese blast furnace 150mm 3sp billet was booked at $617/tonne cfr China and Indian billet at $605/t cfr China. ASEAN billet enjoys a 2% import duty exemption unlike Indian billet.
Local rebar prices of RMB 4,570-4,650/tonne ($699-711/t) in southern China are lower than billet prices in northern China, a Chinese trader says. Offers for ASEAN billet have now risen to $620/t cfr China, but he is unsure if buyers can accept this level.
Another trader says bids are at $615/t China. Domestic billet spot prices settled at RMB 4,650/t in Tangshan on 25 March. Demand for imported billet in China is still strong because of production restrictions, a Shanghai trader says.
Meanwhile, uncertainties over rumoured Chinese export rebate reductions continue to dampen Chinese steel exports. Most Chinese export contracts stipulate a 50:50 sharing of any actual reduction in the current export rebate, a Manila wire rod trader says. The rebate cut is confusing, another says. Some Chinese exporters have already included the rebate cut into selling prices, he notes.
Blast furnace 6.5mm diameter wire rod is currently offered at $720/t fob China and $650-660/t fob from Vietnam, a regional trader says. Freight from China to Manila is prevailing at $35/t and from Vietnam to Manila at $25-30/t.
Wire rod from Malaysia and Indonesia is more competitive, with offers at $675-680/t cfr Manila and traders inviting bids at $10/t below this level. Orders last took place at $665/t cfr two weeks ago. Mounting Covid-19 infections and movement restrictions in the Philippines are weighing on the steel business. “Sentiment is just getting bad all around,” a Manila trader says.
In Thailand, wire rod offers from India and Malaysia are prevailing at $695-705/t cfr. Buyers are bidding lower, notes a Thai trader who has a $680/t cfr bid.
Kallanish lowered its SAE 1008 6.5mm diameter wire rod assessment at $665/t cfr Manila on Thursday, down $2.5 on-week.
Source:Kallanish
