How West Bengal Exporting Billet to Bangladesh?

Since last few months, West Bengal has been emerged as a favorite destination for billet export from India to Bangladesh. As per estimate, about 25,000-30,000 MT of material has been exported during the last two months via road.

Billet manufacturers located in the state prefer to export billet because they are receiving premium of around INR 200-500/MT compared to trade price in local market. Recently, few deals were heard at INR 23,000-23,500/MT (USD 346-354/MT). Whereas, domestic offers are prevailing within INR 22,700-22,800/MT (USD 342-343/MT).

Durgapur based manufacturers reported to sale billet in Indian currency to domestic agents under Form CT1 and Form 12 (A). The agents further exported the material to Bangladeshi buyers under Letter of Credit (LoC). Material handling takes place twice in border via Benapole border.

Material specification & requirement

Grade: 100*100 mm
Composition: Phophorous (0.80-0.90%), Sulphur (0.50%) and Manganese (0.50%)
Delivery period: Immediate; approx 500 MT material shift within 2-3 days
Preferred quantity: Minimum 500 MT is being preferred by agents that again forwarded to exporters.
Form CT1: Certificate for procurement of excisable goods for export without payment of duty.
Form 12 A: Application for a Tax Credit Certificate; exemption of VAT.

Manufacturers who reported involvement in billet export

Steel gaints like Shyam Sales, East India Holding, Satyam Smelter, Gagan, Haldia, including others have been reported for active involvement in billet export during last few months. Besides, RINL (Vizag Steel, Central India) also reported to export billet to Bangladesh. Last deal of 40,000 MT was heard to concluded at USD 363/MT, FoB for 100*100 mm and 150*150 mm.

Bangladesh market scenario

It has been heard that Bangladesh is likely to ramp up its steel capacity from 1.5 MnT pa to over 3 MnT pa in days to come.

The major buyer for billet is Bangladesh due to high imported scrap offers and low billet prices. There are limited billet buyers like BSRM, Abul Khair, RSRM, GPH, Anwar Ispat, and SARM in the nation.

Indian billet export to Bangladesh and Nepal increased by twofold in Feb’16 compared to Jan’16. In FY15, India exported 1.16 MnT of ingot/billet/blooms, which reached to 0.88 MnT in FY16 (consider HS Code 72071190, 72071920, 72071990).

The prime cause of such rise in export quantity is SAFTA agreement that attracts zero duty for SAARC nations. Presently, duty is zero whereas, its around USD 90/MT from other nations (including China).