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Kallanish Kallanish

Knowledge matters Knowledge matters

August, 12th 2020

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JUL 14

Chinese buyers snap up billet


The Chinese billet import market remains firm, Kallanish notes. Overseas suppliers have hiked offer prices and certain Chinese buyers are turning to induction furnace billet which is lower priced.

A 30,000-tonne billet cargo from the Middle East sold late last week at $413/tonne cfr China. A regional trader says this is an effective price of $393/t fob Oman. Offers from Far East Russia are prevailing at $415-420/t cfr China. Last Friday, an Indian mill’s export tender for billet attracted the highest bid from a Chinese trader at $390.5/t fob. Freight to China would cost around $20/t. Billet from these origins faces a 2% import duty in China.

Import prices rose in tandem with market optimism and strong steel futures in China. Indonesian blast furnace billet was booked at $416/t cfr China last week. The same Indonesian mill is now offering billet at above $420/t cfr, a Chinese trader reports. Billet from Indonesia enjoy a 2% import duty advantage, as does billet from Vietnam and South Korea, another trader notes. Market sentiment has improved on expectations that government policies will be put in place to support the Chinese economy, he adds.

Certain importers have recently turned to induction furnace billet from ASEAN because of its competitive cost. A 30,000t cargo of Vietnamese induction furnace billet was contracted Monday at $410/t cfr Shanghai and Caofeidian. Some Chinese traders report hearing another Vietnamese and an Indonesian cargo booked at this level. 

The export of induction furnace billet from Indonesia is "…not workable at all," a Chinese trader says. Indonesian induction furnace billet is currently priced at $410/t ex-works and with freight to China at around $12/t for 10,000t cargoes, it is "…quite hard to export there," a Singapore trader says.