ACCOUNT PROFILE

China’s billet buying spree pushes regional prices higher

Posted on 06 September 2021

Billet import prices are once again rising in East Asia amid China’s return to the marketplace, Kallanish notes. The uptick is tied to anticipated Chinese steel production cuts and the surge in coking coal prices.

Several deals for ASEAN 150mm 3sp billet including that from an Indonesian blast furnace mill recently closed at $685-688/t cfr China, a Hong Kong trader says. Another heard that 20,000 tonnes of Russian billet was booked at around $675/t cfr and Vietnamese billet even at $690/t cfr China. “China is on a buying spree again,” the second trader says.

ASEAN and Middle Eastern billet is currently offered at $690/t cfr China. A Chinese trader says he has offers for Indian and Iranian billet at $680/t cfr. The offers are for October and November shipment. ASEAN billet was offered at $680-685/t cfr at the start of last week. Traders heard that 40,000t of 130mm and 10,000t of 160mm billet from Brazil was booked early in the week at $668/t cfr China.

In Tangshan, spot billet gained CNY 70/t ($11/t) to CNY 5,060/t ($777/t) on 3 September. Chinese domestic spot prices have risen to CNY 5,000/t levels since 31 August after hovering at CNY 4,910-4,990/t for nearly two weeks. The rise in Chinese steel prices is tied to the run-up in the coking coal market, a regional trader says. “Coking coal is expensive; I think China is looking at importing pig iron again,” he adds.

Meanwhile, in Manila, a leading Vietnamese mill is offering blast furnace billet at $700/t cfr, a trader said on Friday. Vietnamese 5sp billet is priced at $680-690/t cfr and Russian 125mm billet 5sp at $685-690/t cfr, an importer says. Some report that Vietnamese EAF and blast furnace 5sp billet is still offered at $675-680/t cfr Manila. However, Kallanish understands from Vietnamese trading sources that most mills stopped offering on account of national holidays on 2-3 September.

Apart from a deal for 100mm square Russian billet at $675-680/t cfr Manila on 30 August, no other deals are heard in Manila because buying interest is thin. “Local demand and prices have simply been weak,” a local trader notes. Kallanish assessed 5sp/ps or Q275 120/125/130mm square billet on Friday at $675-685/t cfr Manila, up $10 on-week.

Source : Kallanish