In recent, China was reported to book 60,000 MT billets from Indonesia. The deal value was reported to be between USD 405-410/MT, CFR China and the shipment is scheduled for Apr’20.
Looking at the current deal; assuming deal value to be USD 405/MT. (USD 405 x currency rate 6.9 x 1.02 import tax x 1.13 VAT) + RMB 35 (logistic cost) = RMB 3,298/MT approximately.
While, the Chinese domestic billet prices are standing at RMB 3,130/MT, 13% VAT inclusive. Although, the current domestic billet prices in China are quite reasonable than imports. But considering the recovering rate of the Chinese domestic market, the marketers believe the above-mentioned import deal is a good move.
Prior to this, Chinese mills had booked nearly 400,000 MT billets from India, Iran & SE Asia in Aug-Sept’19 when domestic prices were high.
According to Mysteel, as of 08 Mar’20, over 58% of construction projects nationwide including both real estate development and infrastructure projects after the prolonged Chinese New Year holiday have resumed now, China’s Ministry of Housing and Urban-Rural Development (MOHURD) reported. This will pose a better recovery opportunity for the Chinese steel market
Recent pig iron bookings – Meanwhile, India’s leading pig iron manufacturer and exporter had floated an export tender for 25,000 MT pig iron, as per reliable sources report to SteelMint. The tender floated is for steel grade pig iron having specifications – C- 3.5% min, S – 0.08% max, Si – 1.2% max, Mn – 1.2% max and P- 0.14% max. The material shipment lay can is between 20-25th Mar’20. There were some indications heard that the tender has been concluded to China at around USD 345/MT, CFR China, however, it could not be confirmed till the time of publishing this report.
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