Import prices for cargoes of steel billet to China were unchanged on Friday October 8, but a growing sense of bullishness from the sell-side was reflected in offer prices, sources have told Fastmarkets.
Chinese market participants returned from their week-long Golden Week holiday on Friday to higher domestic steel billet prices, with the material traded at 5,310 yuan ($823) per tonne ex works Tangshan, up by 100 yuan per tonne from September 30.
“China has opened on a positive note, as was expected. There are no billet bids around the $720-per-tonne cfr range yet, but the way things are going, $720-725 per tonne cfr may be possible next week,” a Singapore-based trader said.
An Indian billet producer said that the local steel market had risen by $30 per tonne at the end of last week, which caused higher offers for both blast furnace (BF) and induction furnace (IF) material into China and Southeast Asia.
A position cargo of Vietnamese 150mm 3sp BF billet was offered at $695 per tonne fob China for October shipment on Friday. Offers for Vietnamese 3sp BF billet produced by two further mills were heard at $690 per tonne fob and $700 per tonne fob respectively on Friday.
After freight costs, that put Vietnam-origin offers at $720-730 per tonne cfr China depending on the seller.
Offers for Indonesia-origin 3sp BF billet were heard earlier in the week at $725 per tonne cfr China and Southeast Asia, while traders have been pitching India-origin 3sp BF billet at $730 per tonne cfr China.
Chinese buyers were giving firm bids at $690-695 per tonne cfr on Friday, but were willing to pay $700-710 per tonne cfr after negotiations, sources said.
Despite the high offer prices, power issues had a negative impact on import steel billet demand as of Friday, sources said.
“Although [local] prices are increasing, we are not seeing a lot of import deals. One reason is that we had the holiday and at the same time, power shortages are still very severe,” a China-based billet buyer source said.
Indeed, an eastern China steelmaker said on Friday that some Chinese buyers were prioritizing securing imported material that require minimal power consumption to process, such as rebar and wire rod, rather than billet and steel scrap.
Fastmarkets’ price assessment for ۳sp-grade steel billet, import, cfr China was $700-710 per tonne on Friday, unchanged from the previous assessment on September 30.
Philippines sees lack of cheap material
Following the sale of Russian 125mm 5sp EAF billets at $690-693 per tonne cfr Manila earlier in the week, prices in the key Southeast Asia buyer nation rose due to a lack of available cargoes.
Fastmarkets’ price assessment for ۵sp steel billet, import, cfr Manila was $700-705 per tonne on Friday, up $10 per tonne day on day from $690-695 per tonne cfr on Thursday October 7.
Vietnamese 5sp, 130mm EAF billet was heard offered at $715 per tonne cfr Manila on Friday, up $5 per tonne from an offer for the same material on Thursday.
Aside from this cargo, the only material this remained available was IF billet from origins including Vietnam at around $715 per tonne cfr, and 150mm BF billet, which is preferred by China and can reach higher prices in the cfr China market, Fastmarkets heard.
Even India-origin IF billet was heard offered at $650 per tonne fob earlier this week, which would be around $715 per tonne cfr Manila with freight costs.
“Given that $693 per tonne cfr Manila was already achieved this week after $685 per tonne cfr was done a few weeks earlier, I think the next hurdle will be $700-705 per tonne cfr,” a Philippine trading source said.
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