Fastmarkets is proposing amendments to the specifications of its weekly price assessment for steel billet, import, cfr China.
Since the launch of the price on February 26, the market has been highly liquid, with Fastmarkets reporting 17 deals involving blast furnace (BF) 3sp billet sold into China.
Of these, over 80% have been from the Association of Southeast Asian Nations (Asean) region produced by mills in Vietnam, Indonesia or Malaysia.
Chinese importers incur 0% import duty when purchasing Asean-origin billet, but must pay a 2% import duty on products sourced from outside Asean, such as India and Russia. Market chatter has suggested the possibility of Chinese authorities removing the import duty on non-Asean material to promote imports of billet, though there has not been any official word on the matter at the time of writing.
With the duty in place, non-Asean billet is sold at a lower price into China, which results in wide transaction price ranges in any given week of trading.
To make the Fastmarkets cfr China steel billet price easier to track, easier to use in contracts and more representative of the market, Fastmarkets is proposing to limit price points in the assessment to Asean-origin cargoes only.
Price points for non-Asean material will not be normalized automatically, but data submitters also will be asked to provide a price estimate for Asean-origin material into the China market.
Price users who wish to calculate how much to offer, sell or buy non-Asean billet to China will be able to use Fastmarkets' cfr China billet price by adding the mandatory 2% import tax.
The rest of the specifications will remain unchanged.
If this change is enacted, the specifications for the assessment will be as follows:
Name:
Steel billet, import, cfr China, $/tonne Quality: 120x120mm to 150x150mm, length 12m, 3sp grade
Quantity: 5,000-50,000 tonnes
Location: cfr eastern China ports (normalized for other mainland Chinese sea ports)
Origin: Association of Southeast Asian Nations (Asean)
Timing: 4-8 weeks
Unit: $ per tonne
Payment terms: Letter of credit on sight
Publication: Weekly, Friday, 5-6pm Shanghai time
Subject to market feedback, the change will take place four weeks from the date of this notice, on Monday May 3.
If you would like to provide price information by becoming a data submitter to Fastmarkets' steel billet pricing, please contact Jessica Zong or Lee Allen by email at:
pricing@fastmarkets.com. Please add the subject heading "FAO: Jessica Zong/Lee Allen, re: China steel billet price."
To see all of Fastmarkets' pricing methodology and specification documents, go to
https://www.fastmarkets.com/about-us/methodology.