Indian mills continue to keep billets export offers up on cost push

Indian billets export market has remained less active this week due to the ongoing Lunar New Year holidays with firm offers and bids heard in the market. However, mills continue to keep their offers high on higher domestic prices amidst cost-push.

SteelMint’s bi-weekly price assessment for Indian billets exports (150*150mm, 3SP/4SP, BOF route) stood at $645/t FOB on 01 Feb’22, up around $21/t w-o-w. Indian billets export price indications have rallied to a eight and half month high as the similar price levels were last seen towards mid of May’21, as per data maintained with SteelMint.

Indian mills are still eyeing higher prices and are reluctant to conclude deals in prices lesser than the domestic realisation. India’s domestic billets prices are currently high following the hike in raw coal and other raw material prices.

However, the Chinese market is closed owing to the New Year holidays till  7 Feb’22. The absence of buyers brought the market to a standstill. SteelMint assessed prices of China’s steel billets imports at $645/t CFR on 01 Feb’22, same as the last week. Traders and buyers  kept away from the market due to the national holidays.

Chinese domestic billets prices remain supported before holidays: According to data maintained with SteelMint, China’s SHFE rebar futures contract for May’22 delivery closed at RMB 4,829/t ($759/t) on 28 Jan’22, witnessing a sharp increase of RMB 118/t ($18/t) w-o-w.

Following a sharp hike in China’s rebar futures and production cuts imposed in Tangshan ahead of the Olympics, steel billet prices in China’s Tangshan rose by RMB 20/t ($3/t) to RMB 4,500/t ($707/t) on 28 Jan’22, inclusive of 13% VAT. Also, prices rose by RMB 60/t ($9/t), w-o-w.

Billets import offers into Egypt inch up: CIS billets export offers for Egypt were heard around $690/t CFR, up by $5-10/t w-o-w.

Billets import prices in SE-Asia rise to match Indian offers: SteelMint’s assessment of imported billets (150*150mm, 3SP) into the Philippines currently stands at around $655-660/t, CFR Manila, up around $8-13/t, w-o-w. However, the market remained inactive.

On the other hand, mills have raised domestic rebar prices amidst coal price surge.

Outlook

Indian billets export inquiries from China are likely to remain quiet during the Lunar New Year holidays till 7 Feb’22. However, prices are less likely to correct sharply. Also, crude steel production from one of the India’s key billet exporters – RINL is expected to take a hit at around 0.1 mnt in February, SteelMint learnt from reliable sources. Production at one of its three blast furnaces will be disrupted for about a fortnight due to delayed supplies of coking coal. This is another reason which may keep prices supported.