After booking a 30,000 t cargo last week, the Indian billet export market reported silent this week. We also noted a rise in the offers. However, the offerings were indicative, and we saw no trades at the increased levels.
Indian mills continue enjoying better price realizations in the domestic market and are posing limited interest for exports due to the following reasons-
- SE Asian nations like Indonesia, Malaysia, Thailand, and the Philippines have a sizeable share in the Indian billet export market. During the conversation with a market participant, we learned that most south East Asian mills are likely to remain quiet and not keen to book billets at high prices for now, as they have the appetite to wait till Mid-Jan ’21.
- The domestic billet prices in China are reasonable than exports, even after hitting an eight-year high level. For instance, yesterday, the domestic billet prices in Tangshan, reported at RMB 4020/t ($615/t), ex-Tangshan, including 13% VAT. On the other hand, Indian imports in China will cost around $660/t, including duties and taxes (considering the Indian billet indicative offers as $550/t, FoB)
- However Chinese steel futures have plunged sharply in the last two days. SHFE rebar futures May’21 contract closed today at RMB 4283/t, down by RMB 63, against last week’s closing. This has slightly turned the market sentiments gloomy.
SteelMint’s bi-weekly assessment for Indian billets (150*150mm, BF route, FoB east coast) is $545-550/t, up by $10-15, against last week.
Outlook: Global billet prices are apt to climb further, owing to continuous rising global scrap prices amid tight availability. Also, the nation-wide lockdown imposed by the UK is likely to back the event. Turkish imported scrap prices have climbed further by $10-15 yesterday in a recent deal.
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