Posted on 26 May 2021
China's billet market sentiment is bearish, Kallanish notes, with Chinese importers further lowering their buying price ideas. In India, billet cargoes destined for China are facing shipment disruptions.
Chinese importers are targeting to book at $650/tonne cfr China and below, down from $680-690/t cfr last Friday. Local billet is currently offered at CNY 4,800/t ($749/t) but there are few takers, Chinese trading sources say. The import parity price of CNY 4,800 is $650/t. “There are expectations that the market is moving downwards,” a Chinese trader says.
A Vietnamese induction furnace mill is still offering billet at $670/t cfr, says a Vietnamese trader. He has heard bids at $650/t China but no deals yet. Vietnamese blast furnace billet is still offered at around $710/t cfr China.
Southeast Asian importers, similarly, have scant buying interest. “No one is biting,” an importer says of a supplier's attempts to induce bids for Russian billet at $710/t cfr. “Most suppliers are just inviting bids at around $710-720/t cfr,” a Manila trader says. He doubts any customers will pay those levels. A trader says he cannot get firm bids at $700/t cfr Indonesia. Traders are seeking bids for billet at $700/t cif Thailand but it is hard to get bids now, a Thai trader notes.
Meanwhile, Indian billet cargoes sold to China are heard stranded at Indian ports because Chinese ports have not been accepting shipments from India for some weeks. There are also problems due to the lack of logistical and port manpower arising from India’s pandemic woes.
With Chinese steel prices coming off now and demand in the Chinese long products market weakening, a Chinese trader suggests some shipments may be cancelled. But a regional trader disagrees. The buyers may divert the cargoes but will not cancel the contracts, he says.
An Indian trader hears that some of the billet cargoes are lying at Indian mills’ stockyards. “There are concerns that those holding these cargoes may be willing to sell the material at lower prices now. The situation will be clearer next week," he observes.
Source:Kallanish
