Chinese traders book billet from new Indonesian mill for long positions
Metal Expert News
Chinese traders book billet from new Indonesian mill for long positions
13 March 20
Chinese traders resumed import purchases of billet, though local prices were similar. They intend to sell the semis in long position in May, predicting an uptrend in the Chinese market over the next two months. Only billet made at Indonesian Dexin Steel has been booked so far, meaning that the buyers are aiming at building ties with the new market player in the region.
Numerous rumors about billet import from Indonesia were circulating in China this week. Most insiders heard about three traders booking 20,000 t each from the Indonesian mill at $405-410/t CFR for April shipment. Metal Expert was able to confirm one contract signed recently at $405/t CFR. Another trader said he was still in negotiations with the Indonesian mill, while the third trader refused to comment. Market sources say the destination was ports in Jiangsu province for all three shipments.
Domestic billet quotes are in the range of RMB 3,200-3,250/t ex-warehouse on March 13, while $405/t CFR is equal to RMB 3,205/t after adding 13% VAT (semis from Indonesia are imported with no import duty). End-user should also pay RMB 30-50/t in both cases (bookings in import and local markets) for delivery.
¡°Rebar futures are hiking every day this week. Some traders may lose money on that. So they want to earn, selling long positions in May at higher prices,¡± a major trader in China told Metal Expert.
Although domestic prices are not higher than import ones, traders decided to buy from Dexin Steel in order to strengthen ties with the new supplier in Southeast Asia. ¡°It is strategy consideration, not only a price issue,¡± a Chinese buyer of Indonesian billet told Metal Expert.
Other traditional overseas suppliers seem unlikely to succeed in billet sales to China at $405-410/t CFR, as most buyers are bidding below $400/t CFR, insiders reported. ¡°Really attractive price is $380-390/t CFR now,¡± another key Chinese trader told Metal Expert.
