China’s preference for imported billets increased over rising domestic prices

“The importing volumes of (billets) increased markedly since early July, mainly from CIS countries and India, as they (steel traders) are gambling that domestic billet prices will still move higher in the coming months,” an industry source in Beijing commented.

Last week, the price of CIS-origin billets for September shipment to China was around $420/tonne CFR, a significant increase over the past three weeks from $405/t in early July. However, the Beijing source noted that after the price hit $420/t, the import volume declined markedly as traders backed away from accepting thinner margins.

As of July 17, China’s domestic price of Q235 150mm square billet in Tangshan, the largest billet producing hub in North China’s Hebei province, stood at Yuan 3,410/t ($487/t) EXW and including 13% VAT, refreshing the eight-month high amid the general optimism in the domestic market, as Mysteel Global reported.

“Recently, billets have been arriving at Tangshan ports – though as yet, not in great volumes – and domestic traders are selling them Yuan 20-30/t lower than the market transaction prices for domestic billet,” a market watcher based in Tangshan told Mysteel Global. “In June, July, and August, billet exports to China exceeded 1 million tonnes each month,” he said.

On the other hand, China’s steel export business remains quiet as domestic mills and traders are still focused on domestic sales. Though Chinese steel suppliers kept raising their export offers in tandem with domestic market increases, overseas buyers paid little heed due to the low price-competitiveness of Chinese steel in the global steel market now.

Over July 11-17, Mysteel assessed the export price of SS400 4.75mm hot-rolled coil (HRC) higher by another $8/tonne on a week at $460/t FOB Tianjin port, Northeast China’s Tianjin municipality, while that of B500B 18-25mm dia rebar also increased further by $10/t on a week to reach $460/t FOB Zhangjiagang port, East China’s Jiangsu province.