China's billet imports are expected to slow down in the coming weeks as high freight rates and uncertainty over domestic price movements during the long journey times deter traders from booking shipments, market sources said March 16.

          “As the domestic market trend in China remains uncertain and with a limited price gap between imports and domestic billet, China's billet imports would likely to slow down,” said a China-based trader.

          Tangshan Q235 billet was assessed at Yuan 4,480/mt on March 16, which is about $610/mt after value added tax deducted. Jiangsu billet was heard at equivalent to $598/mt.

          Offer prices for ASEAN billet, such as Vietnamese and Indonesian, were at $615-$620/mt CFR China while non-ASEAN offers such as Middle Eastern billet were at around $590/mt CFR China.

          The freight cost to ship billet from Vietnam to China is estimated to have risen by $10-$15/mt from January, while the rate to transport Russian cargo from the Black Sea to China has increased by $30-$35/mt over the same period.

          With falling scrap prices, longer delivery cargoes such as Middle Eastern and Russian billets may be tough to conclude given the high risk of Chinese domestic price movements during the long transit time, even though the price looks good for now, market sources said.

          Shipping from the Middle East takes around one and a half months in total, according to a Singapore-based trader. “If scrap prices are moving upwards, then price levels at $590/mt CFR China would sound reasonable. However, I heard that scrap prices are falling at this moment,” the trader said.

          “Not forgetting that Asian cargo has a much shorter transit time, therefore, the risk is lower,” the source added.

--------Steel Business Briefing-----------