Chinese Billet Export Offers Rise on Government’s Investigation

Chinese billet export offers rise amid government’s ongoing investigation on tax rebates enjoyed by Chinese steel mills on exporting billets in the name of square bars.

Chinese billet export prices have increased by USD 5/MT to around USD 325-330/MT, FoB China main port as compared to USD 320-325/MT, FoB last week.

“Billet exports from China officially attracts an export duty of 20%, whereas, steel bars (alloy grade, value added steel products) enjoy a rebate of 13%. Current offers are in the range of USD 325-330/MT, FoB for 150*150 mm billets”, said a Chinese exporter.

Participants confirm that supply from China has reduced in last few weeks due to stricter investigation. If government brings any change in export taxation, billet supply from China will effect significantly. 

Rising coal and iron ore prices supporting prices

Rising iron ore and coal prices are also supporting billet prices in Chinese market. It is to be noted that coking coal prices have increased by USD 5/MT (5-6%) in last one month and iron ore prices have also gained by USD 5/MT (10%) in last one month.

Indian bloom export tender fetches higher bid

Recent bloom export tender by a state owned producer has fetched bids higher by USD 10-15/MT as compared to last tender, which was concluded 15 days back. 150*150 mm bloom bids were in the range of USD 310-315/MT, FoB Haldia Port (which is equivalent to USD 315-320/MT, FoB Vizag Port).

Last tender by Vizag Steel was concluded at USD 305/MT, FoB Vizag Port in Jul’16.

Global billet prices (in USD/MT) as on week 33 (1-7 Aug’16)

Prices in USD/MT
Source: SteelMint Research