Vizag Steel, India’s state owned and one of the primary producers, had floated an export tender of 55,000 MT billet and bloom, which is expiring today.
It is expected that tender will receive participation after Bangladesh government has cleared its stand on duty on imported billet. It is to be noted that the government has imposed a regulatory duty of 20% and a VAT of 15% on imported billet from all origin in its union budget presented on 2 Jun’16.
However, there is a lack of clarity on 15% VAT, whether it will be adjusted with sale of finished steel or importers will not get any credit. 15% VAT is equivalent to 5,000 BDT or USD 63/MT.
Bangladesh based re-rollers highlighted that there is no clarification on VAT and at present it will be treated as a cost to an importer.
Last Indian billet tender fetches bid below USD 300/MT
Last tender by SAIL (Steel Authority of India) from Haldia Port fetched bids below USD 300/MT, FoB. Tender was heard to have cancelled due to low bids. Last tender by Vizag Steel was concluded at USD 315/MT, FoB Vizag Port in early June.
Global billet prices during week 25
| Particular | Delivery | Grade (mm) | Currency | Price | W-o-W | M-o-M | Remarks |
| China Export | FOB China | 150*150 | USD | 290-300 | -10 | -30 | Chinese billet export offers low on short selling. However, domestic prices find support on possible production cut. |
| India Export | FOB Vizag | 150*150 | USD | 300-310 | -10 | -80 | Recent tender by SAIL received bids below USD 300/MT, FoB Indian East Coast; tender was canceled. |
| CIS Export | FOB Black Sea | 125*125 | USD | 310-315 | -5 | -80 | Some deals were reported from Ukraine. Prices are likely to find support. |
| South East Asia Import | CFR SE Asia | 150*150 | USD | 295-305 | NA | NA | Prices have declined due to Chinese factor. |
| Bangladesh Import | CFR Chittagong | 150*150 | USD | 305-310 | -15 | -80 | Prices fell because of 20% duty imposed on imported billet; expected buying is at USD 300-310/MT, CFR Chittagong. |
| Middle East Import | CFR Dubai | 150*150 | USD | 310-315 | -10 | -90 | Prices may sustain on possible production cut in China. |
| Turkey Import | CFR Turkey | 125*125 | USD | 320-325 | -5 | -90 | Turkish mills resumed scrap buying last week, indicates that billet prices may sustain. |
| India Domestic | Ex-Mumbai (excluding Excise) | 100*100 | INR | 22,600 | -300 | -250 | Demand remains subdued. |
| China Domestic | Ex-Tanshang (including 17% VAT) | 150*150 | RMB | 1,850 | 0 | -50 | Chinese domestic prices find support on possible production cut. |
Prices in Currency/MT
Source: SteelMint Research
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