Absence of Chinese billet supplies, improved global demand and rising scrap prices have pushed up billet prices in global market.
Global Billet export offers up by around USD 90/MT M-o-M –
Indian Billet export offers increased to USD 480/MT, FoB which is up by 15% M-o-M (USD 63/MT) . Chinese Billet export offers surged up by USD 90/MT M-o-M amid supply crunch post mills closure to reach USD 530/MT, FoB .
Which all factors have resulted in sharp hike in billet export offers ?
Decision of Chinese government to shutdown substandard steel production to protect the environment, impacted the supply of billet from China. The demand for billet remained high from South-east Asian nations.
Another factor that has resulted in surge in billet export offers is sharp hike in scrap prices. Countries like Turkey, Ukraine etc marched towards melting of iron and scrap to be able to serve as the demand of raw material.
The production of graphite electrodes has also been hit by the closure of small induction furnaces in China. And on the other hand the demand of the same has increased as more and more Electric Arc Furnaces being established by various countries, resulting in surge in billet export offers.
| Major Billet Exporting Countries | |||||
| Country | Export Quantity 2017 (Till June) | Current FOB Prices | Change (M-o-M) | 1M | Remarks |
| China | NA | 550 | 90 | 452 | Shutdown of steel mills resulted in lesser supply pushing up domestic prices and scarce supply in global market |
| India | 1.41 | 480 | 63 | 417 | Declining global supplies and rising prices of graphite electrodes have pushed Indian billet export offers |
| Russia | 7.27 | 505 | 87 | 418 | Reduced material availability and rising scrap prices pushed up export offers |
| Iran | 1.5 | 490-500 | 70-80 | 420 | Recent tender floated by a major Iranian steel maker is likely to be concluded at USD 495-500/MT, FoB. |
| Major Billet Importing Countries | |||||
| Country | 2017 (Till June) | Current CNF Prices | Change (M-o-M) | 1M | Remarks |
| Thailand | 1.07 | 485-490 | 40-45 | 440-450 | Amid limited billet supply and bullish sentiments, billet import prices in South East Asian as well as South Asian nations increased significantly |
| Bangladesh* | 0.04 | 450 | 12 | 438 | |
| Turkey | 2.14 | 463 | 30 | 433 | Rising scrap prices pushed up billet import offers |
| Note : (Quantity In MnT, Prices in USD) | |||||
| Source : SteelMint | |||||
Domestic billet prices in China hovering at six-year high
Market participants credit this price hike to crack down made by Chinese government on small induction furnaces which were making low quality steel and rising steel futures.
Chinese Billet prices in the local market shot up by USD 15/MT (Yuan 100/MT) on Thursday. Prices for 150*150mm Q235 were reported at 3,850-3,900/MT (USD 578), ex-Tangshan (including 17% VAT)
Domestic billet offers in Mumbai are assessed at INR 26,500-28,750/MT (USD 414-449/MT) ex-works for Induction furnace grade and for size 125*125 mm. Trades remain moderate.
| Particulars | Current Price | 1 Month Back | M-o-M | |
| Chinese Domestic Billet Prices (Ex-Tangshan) | RMB 3,850-3,900 | RMB 3250-3,320 | RMB 580-650 | |
|
INR 28,200-28,550 | INR 27,200 | INR 1,000-1,300 |
Source : SteelMint
Price of India is Exclusive of 18% GST
China Billet Price Inclusive of 17% VAT
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