Indian billet export bookings have gained momentum in the past one week, supported by rise in bids from China and SE Asia. Over 100,000 tonnes of bookings were confirmed by SteelMint for both the BF- and IF-route players.
Indian deals
- Indian mills too are jumping into the fray. Private Indian steel mills are reported to be offering 150*150mm billets at $680-690/t CFR for South East Asia and China, higher by $5-10/t from last week.
- An Indian state-owned steel mill had floated a spot export tender for 60,000 t of steel billets (150*150mm, 3SP/4SP grade) recently. The tender, due on 9 Jul’21, has been concluded for a quantity of 30,000 t at $596-598/t FoB on 100% advance payment basis, SteelMint confirmed from market sources.
- The mill is reported to have concluded a parcel of 30,000 t of billets of size 150*150mm, BF route, 4sp grade for Sept’21 shipment at around $595-600/t FoB east coast (against advance payment).
- The mill also concluded a 20,000-t tender for 90x90mm billets, which fetched bids of around $610/t FoB. The destination could not be confirmed.
- Another Indian government-owned mill concluded a tender for almost 18,900 t of billets (125mm, 4SP/5SP) for end-Aug shipment. The tender received bids at around $600 FoB.
- Export offers for Indian billets are up $20/t as per SteelMint’s bi-weekly assessment for the 150x150mm BF-route, FoB east coast, with average prices recorded at $600/t, as on 9 Jul’21.
- In addition to it, Gujarat and Chennai-based mills have also concluded billet export deals for Sri Lanka, Africa and SE Asia.
Global deals
- In a recently confirmed deal, 30,000t Vietnam-origin BF route billets were booked at $665-670/t FoB Vietnam for Aug’21 shipment. Although the destination of the export deal could not be confirmed at the time of publishing but it is expected to Taiwan or China with freight rates ranging from $20-25. Earlier, towards mid-week, a deal for 20,000 t Vietnam IF-route billets was concluded at $665/t CFR China.
- An Iranian mill was reported to have concluded a billet export deal at $609/t FoB earlier last week.
China’s bids for imported billets increased over last week in tandem with the consistent rise in the Shanghai Futures Exchange (SHFE) steel indices. Towards end of last week, futures contracts upped further. SteelMint data reveals, SHFE rebar futures Oct’21 contracts on 9 Jul closed at RMB 5,428/t ($837/t), up by around RMB 304/t ($47/t) w-o-w.
Soon enough, SteelMint noticed China’s renewed buying interest in billets from South East Asia and perhaps even India.
China is implementing strict production curbs to keep crude steel production at CY’20’s levels of around 1 billion tonnes, forcing mills to operate at 70% capacity, which can lead to domestic supply crunch in the second half. Consequently, mills are ordering billets for Aug shipments so they have enough in stock when the rainy season ends.
SE Asian offers rise
In fact, Chinese interest supported prices in SE Asia. Mills raised billet export offers to $690-695/tonne (t) CFR Manila against $680-685/t a week ago. However, Chinese bids were a tad lower at $680/t CFR. Thus, deals are yet to be concluded. But overall SE Asia billet export offers were up $7/t last week compared to the previous.
Vietnam’s BF-route billet offers, at $665/t FoB, increased by around $15/t w-o-w.
Thailand’s billet import offers remained supported too on Chinese interest. Indicative offers were hovering around $680/t CFR.
Outlook
Although the destinations for the above deals could not be ascertained, sentiments in SE Asia are slightly bearish because of rising Covid cases. Therefore, Chinese buyers can be expected to show more interest in Indian offers.
India’s billet exports recorded a massive jump from 2.86 mn t in FY’20 to 7.25 mn t in FY’21. Out of 7.25 mn t exported in FY’21, China occupied a share of 45%, followed by Nepal and Indonesia with 15% and 8% respectively.
Prices as on 8:50 IST, 12 Jul. d-o-d changes indicated against closing price of 09 July
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