Indian mills are continuing to remain active in the billets exports market, thanks to Chinese steel production cuts and power outages in Iran. All these factors are opening up fresh opportunities, so much so that billet export prices hit a two-month high in one recent deal.
This deal, concluded by an Indian state-owned mill, is for 30,000-tonne (t) of steel bloom (150x150mm, 3SP/4SP grade), scheduled for mid-Sept’21 delivery. The deal has been concluded at around $630-635/t FoB, as per sources. However, the consignment will head to a non-Chinese destination.
Importantly, following this deal, Indian billet export prices have risen by $15-20/t to a two-month high compared to the levels being commanded towards the end of last week, as per SteelMint reports.
“The increase in the Chinese rebar futures market over the last few days has driven up sentiments. Therefore, sellers are optimistic of better realisation in the coming days,” said a market source.
In another new offer floated, Vedanta-owned and eastern-India based Electrosteel Steels Ltd (ESL) had floated three export tenders for 30,000 t of steel billets, wire rods and rebar for Sept’21 shipments, as per sources.
Key specifications:
- Billets: 150x150mm; grade: 3SP/4SP; quantity: 10,000 t
- Wire rod: 10,000 t
- Rebar: 10,000 t
All the three tenders have bid validity till this week.
Yet another mill is heard to have floated a billet export tender for Sept’21 shipments. Notably, last week, SteelMint had reported on confirmed billet export deals of over 100,000 t.
Chinese demand high – Meanwhile, Chinese bids for imported billets increased to around $710/t CFR levels on 21 Jul’21. Demand for billets is high in China at present on account of the strictly enforced production cuts. The curbs aim to keep crude steel production at CY’20’s levels of around 1 billion tonnes.
Iran factor – Absence of many Iranian offers is another factor supporting Indian billet export prices. The Iranian billet export market continued to remain quiet for yet another week.
Increasing power outages in Iran, one of the largest billets exporters globally, have put a few tenders in negotiation mode. Esfahan Steel Company (ESCO), a leading steel exporter from Iran, recently sold 30,000 t of the material to China, as per sources. The company concluded the tender at $650-655/t on FoB basis for Sep’21 shipment. Notably, the freight rate from Iran to China stands at around $50/t. Iranian billet export prices have risen by $30/t this week.
Chinese domestic billets prices stable – Steel billet prices in China’s Tangshan continue to remain stable for the second consecutive day on 21 Jul’21 at RMB 5,180/t ($799/t) inclusive of 13% VAT. According to data maintained with SteelMint, Chinese rebar futures contract for Oct’21 delivery fell to RMB 5,561/t ($859/t) on 21 Jul’21, down by RMB 40/t ($6/t) d-o-d. However, it is still on the higher side compared to the closing of RMB 5,559/t on 16 Jul’21.
As per reports, Chinese mills are expecting decent production volumes in the coming days, a sentiment that fuelled demand for imported billets. However, few market participants are still unclear about the production cuts.
Prices as on 9:00 IST, 22 Jul. d-o-d changes indicated against closing price of 21 July
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