China takes large quantities of billet on bullish outlook for May, June: sources

Singapore — Chinese buyers have resumed billet purchases and have bought Indonesian billet for April shipment and extended buying from Russia and India on expectations of strong demand in May and June, according to sources.

Market sentiment was bullish for Chinese domestic demand in May and June, said two eastern China traders, who have opted to build up long positions rather than selling back to billet re-rollers. A weaker ruble and rupee means cargoes from Russian and Indian sellers have become the most competitive, a third Chinese trader said.

Two deals for Indian JSPL billet totaling 60,000 mt of 3SP 150 mm material, were struck this week, with prices at about $400/mt CFR China for early May shipment for, several traders said.

A deal for 30, 000 mt of Russian EVRAZ billet was traded slightly above $400/mt CFR China Tuesday, a buyer from eastern China said.

A week ago 40,000 mt of Russian billet was sold at $404/mt CFR China for May shipment, two Chinese traders said. Three deals totaling 60, 000 mt of billet from Indonesia's Dexin were concluded Tuesday and Wednesday at $407-$408/mt CFR China for April shipment, selling out all the mill's April output, a source at the mill said.

With spot prices in eastern China currently around Yuan 3,280-3,300/mt and futures prices weaker, buying indications fell to $390-$395/mt CFR China Friday, two traders in eastern China said, down $10-$15/mt from earlier this week. For quantities around 40,000-50,000 mt, Russian material was likely tradeable below $390/mt CFR China, a third trader said.

Key billet importers in Southeast Asia have almost disappeared this week. Sellers turned their eyes to the Chinese market and on Friday cut offers to $395-$400/mt CFR China for Indian and Russian cargoes for May shipment.

Prices are expected to fall further next week with possibly lower offers from India, two traders said.

"Prices will fall to $370/m/FOB India next week, so the price should be less than $390/mt CFR China by next week," said a Singapore-based trader.

."We will watch the spot market and futures market to decide on further purchases," said a trader in eastern China.