Indian billet export price assessment for week 28 (3 July – 9 July) increased by USD 5/MT. Price for 150*150 mm sized billet (having a chemical composition C: 0.17-0.23%, Mn: 0.60-1%, S&P: 0.05% Max, Si: 0.1% Min) is assessed at around USD 415/MT FOB India. Last deal for same size and grade from India was settled at around USD 410/MT FOB India,by JSW Steels in third week of June.
Speaking to several market participants, SteelMint assessed that buyers are willing to bid at around USD 410-415/MT FOB and sellers are expecting a price level of around USD 415-420/MT FOB.
India billet is largely being exported to South Asian countries like Thailand, Indonesia, Philippines and Bangladesh. Current price level in South East Asian countries are assessed at USD 435-440/MT CFR levels.
There are no fresh offers from large mills, however Vizag steel (also know as RINL) is expected to come up with a bulk export tender in second week of July for August shipments.
Why Prices are increasing ?
Global billet prices are increasing for three prime reasons, one – absence of Chinese billet from the market and second – rising graphite electrode prices in global market and third- rising global scrap prices.
Absence of Chinese billet: Chinese billet supplies are missing from the market for quite some time. This is because of government’s directive to eliminate small induction furnaces (which produced about 50-60 MnT according to industry participants) by 30th June, which has created shortage of billets in domestic market. Domestic billet prices have increased sharply in last few months and currently being traded at RMB 3,280/MT (USD 482 ) ex-Tangshan, including VAT of 17%
Rising Graphite Electrode Prices: Prices of graphite electrodes which is used by electric arc furnaces is increasing consistently owing to supply issues. According to sources, prices have doubled from USD 2000/MT to USD 4000/MT in spot market in a short time. Around 2 to 2.5 kg of graphite electrode is being used per tonne of steel, according to industry experts.
Rising Global Scrap Prices: Ferrous scrap import prices in Turkey have moved up owing to less availability and rising prices in Turkey’s domestic steel market. HMS (80:20) from US is assessed at USD 297/MT, CFR Turkey, up USD 7/MT W-o-W. Following this scrap import prices to South East Asian regions have also moved up.
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