Weekly: Global billet market overview

The global billet prices are on a continuous rise. Despite falling Chinese rebar futures, sizeable billet volumes traded to China and SE Asian destinations from Vietnam and Russia. However, the buyers are now anticipating the price drop on declining futures and have put-on the wait and watch mode. The event has widened the bid-offer spread and could limit the near future trades.

CIS- The offers from the region remain unchanged, against last week, and were at $ 398/t, FoB. Sizeable billet volumes booked for SE Asian destinations.

India- SteelMint assessed Indian billet (150*150mm) export price at $410/t, FoB India, up by $5 against last week.

• Almost every primary Indian mill continues to remain inactive in the global billet market for this week as well, except for Vizag Steel. The company has floated two boom export tenders this week. Among the two, one is for spot sale for which the due date was 20 Aug’20 (30,000 t, 150*150mm). The due date for other tender is 24 Aug’20 (20,000 t, 200*200mm). Payment terms for both the tenders are 100% advance while the shipment schedule is by end-Sep’20/early-Oct’20.

The SteelMint heard from the sources that, the company concluded the spot sale tender at around $415/t, on a FoB India basis. However, we could not confirm this until the publishing time of this report.

• The other mills are enjoying better domestic realizations and are in no mood for the exports. Owing to this, some mills have also curbed their export allocations, SteelMint learned from trade sources.
• Chinese bids for Indian billets were at $425-430/t, CFR, unchanged from last week.
• An Indian primary mill has recently concluded some billet export deals for Nepal on like realizations as domestic. Deals for 2-3 rakes (equivalent to 6,000-8,000 t) of billet export deals to Nepal were concluded at around $445/t CPT Nepal (Raxaul/Jogbani border).

Iran- SteeMint’s assessment for Iranian billet has moved up by $5/t w-o-w to $400-405/t, FoB Iran.

• Billet export offer prices from Iran increased for the second straight week. Sizeable billet volumes were sold to SE Asia and China.
• Khouzestan Steel Company concludes 30,000 t billet export tender– Iran’s leading billet exporter, Khouzestan Steel Company (KSC), has booked 30,000 t billets for China through a tender, floated last week. According to SteelMint sources, the company concluded the tender at $405-406/t, on FoB Iran basis. The shipment is likely to be scheduled for end-Sep’20.
• Chadormalu and SKS booked 30,000 t orders each-Chadormalu Mining and Industrial Company and South Kaveh Steel (SKS) sold billet via tender at prices of $398/t and $395/t respectively, on FoB Iran basis. The schedule for shipments is by mid-Sep’20/end-Sep’20, with China the likely destination.
• ESCO is still negotiating its 20,000 t billet tender and the result may come in next week.
• Domestic billet prices at IME fall further by IRR 1,469/kg ($31/t)- Domestic billet prices in Iran are on a continuous decline due to slow demand. It was the second consecutive week that prices have fallen. According to SteelMint sources, approximately 80,800 t billets were traded at the Iranian Mercantile Exchange (IME) at an average price of IRR 73,768/kg ($364/t), down by IRR 1,469/kg ($31/t) from last week.
• Iran steel exports witness 31% y-o-y decline– Iran steel exports have registered a y-o-y decline of 31% during the first four months of the current Iranian year (20 Mar’20-20 Jul’20). With 1.66 mn t of exports, semis captured ~75% share. Meanwhile finished steel exports stood at 0.57 mn t.

SE Asia- SteelMint assessed the SE Asian billet import offers at $430-435/t, CFR, unchanged against last week.

• The bid-offer spread continues to exist in the SE Asian billet import market for this week as well on falling Chinese steel futures supported by sluggish finished steel demand and dropped global scrap prices. However, this week, the bids have moved up marginally, but not in parallel with the offers. The offers have reached to $440/t, CFR SE Asia levels, up by $10, against last week while the buyers are bidding at $420-425/t, CFR.
• Despite the disparity, few deals in Thailand and Indonesia have concluded at a price level of $430-435/t, CFR.
• Vietnam- This week, the country was offering billets at $430/t, FoB, up by $10 against last week. According to SteelMint sources, in the past 15-20 days, the country has booked approximately 250,000-300,000 t billets between price levels of $424-430/t, CFR.

China- This week, Chinese domestic billet prices closed with a drop of RMB 20, against last week’s closing. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,400/t ($492/t) in Tangshan, inclusive of 13 % VAT. The bids for imported billet in China were between $420-430/t, CFR, for non-ASEAN billets.

Global billet market snapshot-