Chinese customers have increased their interest in importbilletpurchases as there are expectations of lower crude steel production in the second half of the year inChina, and as a result futures and localbilletprices in the country have improved.
A contract for 30,000 mt of ex-Indonesia 3SPbillethas been closed at $670/mt CFRChinafor August shipment this week, according to sources. New offers for 3SP/4SPbillethave been increased to $680-685/mt CFR. Last week, most bids for 3SPbilletwere below $670/mt CFR, but “todaybilletprices went up and $670-675/mt CFR is definitely workable,” a local trader said.
Negotiations for ex-Vietnam 5SPbillethave been heard at $650-655/mt FOB, which is higher than a deal at $642/mt FOB done toChinaa week before, but there was no information as to whether the new deal was done or not. The price of $650-655/mt FOB corresponds to $680-685/mt CFRChina, according to sources.
As a result, the tradable price level for importbillettoChinahas improved to $670-680/mt CFR.
This happened after the improvement seen in the local market. Steel mills in Tangshan have increasedbilletprices by RMB 40/mt ($6.1/mt) today, July 6, to RMB 4,930/mt ($763/mt) ex-warehouse, which is equivalent to $675/mt, excluding 13 percent VAT.
Rebarfutures at Shanghai Futures Exchange have added RMB 151/mt ($23/mt) today, closing at RMB 5304/mt ($821/mt).
Market sources expectChinawill be active in the importbilletmarket for some time, but prices will depend strongly on therebardemand in the spot market. “Everybody is getting greedy but the end-user market is very weak,” an international trader said.
The better situation in the Chinesebilletmarket is going to support sentiment in the Southeast Asian and East Asian markets.
An Indian private producer has already sold 20,000 mt of wire rod gradebilletto Taiwan at $695/mt CFR, which may include a minimum $15/mt extra.
$1 = RMB 6.4613