Bangladesh based re-rollers showed their concerned over rising defaults from Chinese billet suppliers amid rising prices. In last few weeks, quite a few contracts had been cancelled, which were signed at a lower price.
Bangladesh has re-rolling capacity of around 3.5-4 MnT and imports around 1.5-2 MnT of billet every year.
“China suppliers cancelled a large number of steel contracts signed prior to the price hike, thus, resulting in shortage for those, who rely on them for their regular supply. Most of mills have no other option, but to pay a premium for immediate delivery”, said a larger re-roller based in Chittagong (Bangladesh).
Another re-roller, who confirms that his contact of 40,000 MT billet was signed at USD 370/MT, CFR Chittagong in first week of Apr’16, but supplier denied to load the ship.
India becomes a preferred location
India becomes a preferred sourcing option for Bangladesh for two reasons. One is the differential duty on Indian billet imports and second is quick deliveries.
Recently, a tender of 30,000 MT concast billet (150*150 mm) concluded at USD 363/MT FoB Vizag Port. Cargo will be shipped to Chittagong (Bangladesh) in May’16.
Small billet makers in India, who typically use induction route, are selling 100*100 mm sized billet at USD 370-375/MT, CFR (Benapole) Bangladesh land port.
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