China booked around 60,000 MT billets of size 150*150 mm from an India based private mill recently. The deal value was reported to be around USD 395/MT, CFR China. As per sources the deal has been concluded in lots of 20,000 MT each. The prime reason for the country’s swinging interest towards billet imports is reasonability; the Chinese mills are getting competitive rates for imported billets than domestic.
Looking at the current deal; assuming deal value to be USD 395/MT.
(USD 395 x currency rate 7.1 x 1.02 import tax x 1.13 VAT) = RMB 3,232. As per sources, even after including local freight the price of imported billet would stand around RMB 3,267/t.
Today, on 15 Oct’19, the ex-factory price of general carbon billet in Tangshan settled at RMB 3,390, cash including tax. Thus imported billets are still competitive against Chinese domestic billets.
A week back, similar quantity of billets for export was booked to China by n Indian mill at around USD 405/MT, CFR levels.
Also few market sources shared with SteelMint that “Traders are actively booking billets and are also hedging at future rebar exchanges in China”.
Leave a Reply