Extended waiting times and bottlenecks at major Chinese ports have resulted in lower demand for imports of steel billet and higher freight costs for such shipments this week, sources told Fastmarkets on Friday August 13.
A rise in the numbers of Covid-19 cases across China has led to authorities raising quarantine measures at most major ports to limit the spread of infection, with vessels being required to wait 21-28 days at ports before unloading, sources said.
The increase in waiting time has led to recent steel billet contracts including clauses saying that either the shipper’s or receiver’s account must pay the costs of any quarantine-related delays.
Freight rates from India to China for 30,000 tonnes of steel billet rose to $80 per tonne this week, while 20,000 tonnes of billet from Vietnam to China would now cost $27-30 per tonne, sources said. The previous rates were $70 and $25-30 per tonne respectively.
Despite the logistical challenges, some steel billet deals were concluded to Chinese trading companies earlier this week, at prices which were deemed too high by steelmakers in the country.
Indonesian 3sp 150mm blast furnace billet was sold at $677 per tonne fob at the beginning of the week, which would be equivalent to $705 per tonne cfr China, Fastmarkets heard.
Vietnamese-origin BF billet was sold at $700-703 per tonne cfr China, while India-origin BF billet was rumored to have sold at around $700 per tonne cfr. Tenders for Indian BF billet were rumored to have been concluded at $610-625 per tonne fob this week for 150mm material, with China believed to be the consumer destination, sources said.
But following the drop in Chinese ferrous futures prices and local steel prices on Thursday, combined with the Covid-19 port problems, sources said that no Chinese importer would pay more than $680-695 per tonne cfr for billet by Friday.
Fastmarkets’ price assessment for 3sp-grade steel billet, import, cfr China, was $700-705 per tonne on Friday, narrowing from $695-710 per tonne one week before.
Sources could not be sure of the near-term future for pricing in the cfr China steel billet market, given its recent volatility.
“It is like going to a casino now, in the Chinese market. [The price of] iron ore is softening, scrap is not doing well and there is a seasonal slowdown across Asia. But you never know what announcement there will be over the weekend in China, which could change everything,” a South Asian trader said.
“I hope Chinese prices hold up. There needs to be at least one market where prices are rising, because Southeast Asia is dead. Some Chinese purchases happened this week but [they were] based on speculation. [The buyers] are speculating that, once the material arrives, the mill buy price will also have risen,” a second South Asian trader said.
“China will pay no more than $680-685 per tonne cfr for billet today. Vessel waiting times in China have increased now,” a Russian billet seller source said on Friday.
A Singaporean billet trader said on Wednesday that he was sensing more bullish sentiment in the market following expectations of greater steel demand in China from September onward, but by Friday he had told Fastmarkets that the market was “not good” over the intervening two days and that a Chinese customer had recently dropped out of negotiations with him for a billet cargo.
این مطلب بدون برچسب می باشد.