Are Chinese Billet Exporters Getting Active?
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Chinese billet prices have corrected by RMB 80/MT (USD 12) in last few trading sessions owing to higher inventories and falling re-bar demand amid extreme climate affecting construction activities. Domestic offers for 150mm billet stand at RMB 3,650/t (USD 562),ex Tangshan (China),including 17% VAT.
This gives some room for Chinese billet traders to explore seaborne market. But is it enough for China to make its come back to billet exports in a big way?
Market participants are not very optimistic on billets getting exported from China in big way but some shipments in short term cannot be ruled out. Current offers for Chinese billet of grade Q235 and size150mm are assessed in the range of USD 530-535/MT FOB China, which is equivalent to USD 540-545/MT CFR SE Asia.
"Chinese billet offers to Philippines heard at USD 545/MT CFR although no deals have been reported at these levels. Russian sellers are not active and Indian offers are too high. Due to political unrest in Iran, SE Asian buyers are not very keen in Iranian cargoes. If situation persists for some more time, people will start importing from China." said a billet trader based in South Korea.
Chinese export tax adjustments which was applicable from 1st Jan 2018 has little impact on exports. Chinese traders will be exporting billets under square bar and can claim a rebate of 13% same as last year, he further added.
Global Billet Prices
| Particular | Delivery, Size | Price | Change (W-o-W) | Remarks |
| India Exports | FOB India,150mm | $535-540/t | +$5-10 | No allocations from Indian mills as domestic prices are higher than export realizations |
| India Exports | FOB India,90mm | $535-540/t | +$5-10 | |
| China Exports | FOB China,150mm | $530-540/t | -$5-10 | Domestic prices drop on higher inventories and lower re-bar demand |
| CIS Exports | FOB Black Sea,130mm | $515-520/t | 0 | Mills are yet to return to market post new year holidays |
| Iran Exports | FOB Iran,130mm | $515-520/t | +$5-10 | Last deal from Iran by KSC was reported at $520/t FOB. However with ongoing political unrest buyers are hesitant to make purchases from Iran |
| Middle East Imports | CFR Dubai,130mm | $530-535/t | +$5-10 | Largely importing from Iran |
| SE Asia Imports | CFR Philippines,130mm | $540-545/t | +$5-10 | No major deals reported |
| Egypt Imports | CFR Egypt,130mm | $535-545/t | +$5 | Low buying interest amid weaker domestic demand for re-bar |
| India Domestic | Ex-Mumbai,100/125mm (Excluding 18% GST) | INR 35,200 | +INR 2000 | Domestic prices increase as some major iron ore mines have been closed, creating a short term scarcity of raw material |
| China Domestic | Ex-Tangshan,150mm (Including 17% VAT) | RMB 3,650/t | -RMB 30 | Domestic prices drop on higher inventories and weaker re-bar demand |
Source: SteelMint Research
