Indian billet export prices surge by $15-20/t in recent deals

• Over 66,000 t BF route billets booked in the last five days
• Chinese billet prices at a 9-year high after CNY holidays
• Turkey’s imported scrap price increased by $10-15/t in a recent deal

It was the second consecutive week when Indian mills were active in the global billet market. Export prices saw a jump of around $15-20 in recent deals and tenders. Our sources confirmed that in the last five days over 66,000 t BF grade billets were booked for SE Asian and Chinese destinations in the price range of $565-570/t, CFR (equivalent to $530-540/t, FoB India).

SteelMint’s bi-weekly assessment for Indian billets (150*150mm, BF route, FoB East coast) is currently at $535/t, up by $12-15 against last week.

Confirmed deals:

An Indian state-owned mill booked 30,000 t billets through a tender at around $530/t, FoB levels. The shipment is scheduled for end-Mar ’21 with China as the likely destination. The mill had also floated the spot sale tender for 30,000 t billets, at the end of the last week. It is heard to have received bids at $540/t, FoB levels.

Another state-owned mill reported having booked 35,100 t billets/blooms (billets- 18,900 t/150*150mm, blooms-16,200 t/200*280mm), towards the closing of last week. The deal was done off-tender. According to SteelMint sources, the company managed to achieve a price level of around $540/t, FoB India levels. The shipment is scheduled for end-Mar ’21 with China, and a SE Asian nation as likely destinations.

Deals and ongoing tenders snapshot-

What factors have shifted the interest of Indian mills towards exports?

• Chinese domestic billet prices surge post CNY holidays – The rising domestic billet prices in China amid strong seasonal demand, supported by increasing Chinese rebar futures is driving the billet exports from India. For instance, billet prices in Tangshan, (Hebei province of China) have hit 9-year high levels on production cuts which have added fuel to the price hike globally.

• Hike in global scrap prices – Imported scrap prices in Turkey have moved up by $10-15/t towards the closing of the last week, sources have confirmed to SteelMint. A black sea region-based steelmaker has booked USA origin bulk scrap cargo. The cargo comprised of shredded and bonus at $440/t and $445/t CFR Turkey basis respectively.
• Softened Indian steel prices – Amid sluggish finished steel demand in the domestic market, the secondary mills have now held the down-trending billets offers. According to market sources, mills have limited inventories at their end, as they (mills) sold sizeable billet lots, recently. This is likely to drive billet exports from India.

Outlook –The Centre recently released an important notification that will alleviate the conditions of the secondary producers but put more pressure on domestic prices. As per the new notification, the government has allowed the usage of steel produced by secondary steel manufacturers in the construction of highways. Earlier, in such projects, road developers were required to use steel produced by the primary producers. The decision has been taken in view of rising prices of the steel supplied by the primary mills. This is likely to lower down the rebar price differential between primary & secondary mills.

Thus, Indian mills are likely to remain active in the export market in both the semi-finished and finished steel segments.