Weekly: Global billet market overview

Global billet prices continue rising despite limited buying interest. The prices from a few countries are at a new high. For instance, prices from Iran are at an all-time high, while Indian billet export prices recently reached a seven-year high in a recent tender hosted by an Indian state-owned mill.

While on the other hand, the buyers were anticipating a fall leading to a high bid-offer spread.  The uptick in global scrap prices pulled up the offers across the globe. It has also ended up canceling a few tenders. The uptick in global scrap prices pulled up the global billet prices.

India- SteelMint’s bi-weekly assessment for Indian billet (150*150mm, FoB east coast, BF route) is $570/t, up by $5-10 against last week.

• The Indian billet export prices have hit a seven-year high level in a recent export tender (spot sale) hosted by a state-owned mill for 30,000 t blooms (150*150mm, 3SP/4SP grade). According to SteelMint sources, the mill concluded the tender at $575-576/t, FoB India. The shipment is likely to be scheduled for mid-Feb ’21.
• The other primary mills broadly remained silent and seen enjoying the domestic market. No offers were noted from these mills. “We are presently not interested in offering billets for export considering higher realizations in the domestic market. Notably, Indian primary mills have lifted rebar prices by INR 2,500-3,000/t for Jan’21. However, considering the current scenario, our export price expectation is around $575-580/t FoB levels”, shared a market participant from a primary mill.
• On the other hand, Indian secondary mills have offered at $600-610/t, FoB for Indonesia.

CIS- The offers have risen sharply post new-year holidays and are currently at $590-595/t, FoB Black Sea. Our Vietnam based source mentioned – ” Russia is offering billets at $615 CFR levels for the Philippines.”

Iran- SteelMint’s bi-weekly assessment for Iranian billet is $565-570/t, FoB, up by $15-20 against last week.

• Following global trends, Iranian billet export offers continue rising for this week as well. The uptick in global scrap prices pulled up the export offers to $570-575/t, FoB Iran levels. However, we haven’t witnessed any deal at the increased price levels. During conversations with a few leading steel exporters, we learned that they are targeting similar price levels in their upcoming tenders which are likely to be floated by the next week.
• The Industry Ministry of Iran has recently announced a policy that mentions that steel products have to be sold at prices equivalent to 70% in the Commonwealth of Independent States (CIS) markets at the Iran Mercantile Exchange. Currently, the domestic market prices at IME are a function of 80% of the CIS price.
• Economists believe that such policies will always profit the middlemen and is likely to hurt the mills, end-consumers, and investors. However, steel mills have no clarity about how this policy will impact the Iranian domestic and steel export market dynamics, SteelMint learned during a conversation with a few leading mills.
• The new price policy negatively hit this week’s IME billet trades: The trade volumes have plunged by around 72,000 t w-o-w. However, the prices have surged further by IRR 5,393/kg ($25/t). According to SteelMint sources, approximately 60,000 t billets were traded at IRR 117,168/kg ($464/t) against the offered quantity of 133,596 t.

SE Asia- This week, SteelMint’s assessment for billet import in SE Asia is $600-605/t CFR, up by $10-15 against last week.

• The trade silence continues to exist in the SE Asian billet import market on rising prices leading to a wide bid-offer spread. According to our sources, the offers reported hovering at $620/t CFR levels. However, the buyers posed limited interest in making any purchase and have seen bidding at $600-605/t, CFR levels. Currently, they are in a wait and watch mode, anticipating a fall in prices. During conversations with market participants, SteelMint learned that SE Asian buyers have enough appetite until Jan ’21.
• Vietnam- The BF billet export offers from the country surged by $30 this week after the country booked sizeable volumes for Taiwan at $585/t, CFR, earlier this week. However, SteelMint could not confirm the quantity until the publishing time of this report. Currently, the BF route billets from Vietnam reported having offered at $600/t, FoB. While IF route billets heard offered at $600-605/t, CFR Philippines.
• Thailand- Billet import offers are hovering at $600/t, CFR from Vietnamese and Indonesian mills.
• Apart from the above offerings, we also heard Japanese and Malaysian BF route billets offered at $620-630/t, CFR levels for the Philippines.

Chinese domestic billet prices up by RMB 60 ($9.2) w-o-w- This week, the billet prices in the Tangshan market (northeast China) settled with a rise of RMB 60 ($9.2), against last week. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,800/t ($589/t) in Tangshan, inclusive of 13 % VAT.

 Global billet market snapshot-