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China: Billets import fall 10% m-o-m in Oct'21 on volatile steel futures, output curbs

China, the world’s largest steel producer, registered billets import of 1.21 million tonnes (mn t) in Oct’21, down by 10% m-o-m as compared to 1.34 mn t in Se...

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23 Nov 2021, 18:55 IST
China: Billets import fall 10% m-o-m in Oct'21 on volatile steel futures, output curbs

China, the world's largest steel producer, registered billets import of 1.21 million tonnes (mn t) in Oct'21, down by 10% m-o-m as compared to 1.34 mn t in Sept'21, data maintained with SteelMint shows.

Vietnam leading exporter

Vietnam continued to be the largest exporter of steel billets to China at 0.30 mn t in Oct'21. However, the export volumes witnessed a significant decrease of 23% m-o-m as against 0.39 mn t in Sept'21. Notably, Vietnam's domestic demand remained subdued amid Covid concerns resulting in mills exploring the exports market actively.

India, surpassing Indonesia and Oman, occupied the second position in the top exporters' list in Oct'21 with 0.27 mn t followed by Indonesia with 0.18 mn t. Imports of steel billets from India increased a sharp 59% while those from Indonesia were down by 5%, m-o-m.

Why have imports fallen?

Steel production cuts since the past few months amidst volatility in Chinese rebar futures, uncertainty in domestic billet prices and absence of firm bids resulted in a decrease in imports, SteelMint understands.

SteelMint's assessment of China's imported billets (150*150mm, 3SP) prices rose to $706/t CFR in end-Sep'21 from $659/t CFR levels in end-Aug'21. Prices fell to $650/t CFR by the end-Oct.

According to data maintained with SteelMint, the Chinese SHFE rebar futures contract for Jan'22 delivery closed at RMB 4,646/t ($727/t) in end-Oct'21, falling from RMB 5,706/t ($893/t) assessed in end-Sep'21.

Billets imports down y-o-y in Jan-Oct'21

Imports of the material into China stood at 9.33 mn t in Jan-Oct'21, a significant decline of 38% y-o-y as against 15.07 mn t in Jan-Oct'20.

Considering y-o-y, Vietnam was the largest exporter of steel billets with 2.24 mn t followed by Indonesia and Iran with 1.41 mn t and 1.15 mn t, respectively.

Outlook

Chinese buyers have kept away from booking imported billets cargo aggressively for some time due to volatility in Chinese rebar futures and the absence of firm bids which may result in lower import volumes in Dec'21, SteelMint notes.

 

23 Nov 2021, 18:55 IST

 

 

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