Indian mills remain active in the billet export market

Indian mills continued to remain active in the billet export market for yet another week. According to SteelMint sources, an Indian state-owned mill sold 30,000 t billets through a tender at $591-593/t, FoB. The shipment schedule is for mid-June ’21, with China as the likely destination. However, the tender floated was for 90,000 t billets, out of which 30,000 t got sold. The status of the remaining lot could not be confirmed until the publishing this report.

The other primary mills broadly remained silent. SteelMint didn’t hear any substantial export offerings from these mills.

On the other hand, a couple of secondary mills reported having sold over 15,000 t billets in SE Asia and Africa. According to our sources, these mills achieved a price level in the range of $575-585/t, FoB Kandla (the Western India Coast).

SHFE rebar futures pulled up the Chinese bids: In the past couple of days, Chinese rebar futures registered a hike of around RMB 106 ($16). SHFE rebar futures contract today closed at RMB 5,188 compared to RMB 5,165 closing of yesterday.

Owing to this, Chinese buyers were heard having raised the bids to $630/t, CFR from $620/t, CFR until the start of this week. The domestic billet prices remained broadly unchanged and today was reported at RMB 4,940/t ($760/t) ex Tangshan including 13% VAT. It means Indian imports are reasonable in China, as the landed cost for Indian billets is approximately $730/t (RMB 4,743/t), including duties and taxes. However, Chinese buyers are preferring ASEAN billets and CIS billets due to lesser delivery time- SteelMint learned from international traders.

SteelMint’s bi-weekly assessment for Indian billets (150*150mm, BF route, FoB East coast) is $595/t, down by $5-10 against last week.

SteelMint’s billet (IF route) index came down by INR 1,000/t d-o-d to INR 40,900/t exw Raipur yesterday.

Outlook: Amid the second COVID wave and increasing lockdown restrictions, the Indian domestic market is becoming sluggish and consequently, the Indian mills are likely to increase export allocations.