China buying resumes, mops up ASEAN billet

China has resumed active billet import buying this week, Kallanish understands. Stronger Chinese steel futures and physical domestic markets are supporting this. And it is providing relief to ASEAN mills, which are faced with weaker home markets due to the rainy season and Covid-19 curbs.

Two large traders are heard to have booked Indonesian blast furnace 150mm billet at $680/tonne cfr China this week, Chinese market sources say. The deal closed around 6 July, a Chinese trader says. Another hears the bookings were for 80,000 tonnes.

Vietnamese blast furnace billet was meanwhile ordered on 7 July at $655/t fob, mill sources in southern Vietnam say. Freight is estimated at $25/t, Vietnamese and Chinese sources say. Also on 7 July, a cargo of Vietnamese induction furnace billet sold at $665/t cfr China. Previously, Vietnamese blast furnace 150mm billet had closed at $650/t fob on 23 June to China and the Philippines.

Suppliers are hiking offers due to Chinese buying interest. Indonesian blast furnace billet is heard offered now at $685-695/t cfr China. A leading Vietnamese mill has raised its blast furnace offer price to $665/t fob Vietnam. Vietnamese induction furnace billet offers are prevailing at $670/t cfr. But a Chinese trader said on Thursday there are still mills in Vietnam offering blast furnace billet at $650/t fob.

Meanwhile, domestic spot prices have been rising consecutively since the start of the week in Tangshan, to CNY 5,020/t ($775/t) on 8 July. This was up CNY 20 on-day and CNY 150 since 5 July. Some regional trading sources report hearing certain Chinese buyers are now willing to accept $685/t cfr for imports. "It makes sense since deals have been dealt at $680/t," a Shanghai trader says.

A Thai mill is heard to have sold electric arc furnace billet at $675/t cfr China during the week. Thai trading sources say they are receiving bids for re-exports of Iranian billet, already lying in Thailand, at $645/t fob, equivalent to around $685/t cfr China.

Anna Low Singapore