Billet price in China improves on expected production cut by Chinese steel mills.
Chinese local steel sentiment seems to be motivated in past 20-25 days. Improved spot iron prices at Chinese ports and new strict pollution standards set by the government has uplifted domestic billet prices along with export offers in China.
Despite non-acceptance in the market, export offers for billet which were heard at USD 285-290/MT last week, increased to USD 295-300/MT FoB China.
Meanwhile, billet offers (150*150) in local market witnessed an uptick of around RMB 50/MT, W-o-W, currently offered at around RMB 1,830/MT (USD 295). According to sources, local billet prices have increased on expectation that there may be some production cut in China, under strict pollution norms. Chinese government has demanded upgradation in technology for better pollution control in the country and to shut down the inefficient mills running in China.
Global Offers for Billet
Turkey, after emerging as active buyer for billet in global market, is receiving different offers from various countries. Currently, offers for billet to Turkey are at USD 312-316/MT FoB Black sea, USD 318/MT FoB Egypt and USD 295-300/MT FoB China.
Steel export increased from China
China exported around 1.943 MnT steel to India and 1.050 MnT to Turkey during Jan-June’15. SteelMint assessed that export of long steel (including billet) from China to Turkey increased drastically by around 175% in June (M-o-M).
Outlook
Looking at the reclutancy among global buyers, the prices seem difficult to sustain for longer time.
USD 1 = RMB 6.21, as on 01 Aug’15
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