Indian Billet Exporters Turn Active Post Chinese Holidays

1. Chinese market re-opened on Monday after a week long holiday
2. Some billet bulk deals from India reported last week
3. Indian bulk billet exports rise three folds in Sep

Indian billet exporters have turned active post Chinese golden week holidays, which ended on 8th October. SteelMint learnt from market sources that two bulk deals have been concluded last week for South East Asia.

Indian bulk billets have increased three folds from 47,000 MT in August to 125,000 MT in September, according to data maintained by SteelMint.

According to market participants, deal has been concluded at around USD 500/MT FOB Indian main port. Vessel freight from India to SE Asia for 20,000 MT is around USD 20-25/MT.

Billet export prices have corrected from a level of USD 525-530/MT FOB India in third week of September to USD 500-505/MT FOB.Prices have corrected on account of Chinese holidays and lack of trade activities.

However, Chinese steel prices have shown some strength yesterday as government is taking several measures to address its rising pollution levels. The measures include shutting down polluting steel and coal capacity in key steel producing regions from November 2017 to March 2018.

People expect steel exports from China to remain low in coming months, which may lend support to global prices.

Last billet offers in Tangshan region (China’s largest billet producing region) are hovering at around RMB 3,610/MT (USD 547/MT) including a VAT of 17% , which was recorded at RMB 3,500/MT (USD 531/MT) before Chinese holidays started.

Trade activities have not resumed completely and participants prefer to wait till market gets a clear direction. Chinese billet export offers to SE Asia was heard at around USD 530-535/MT CFR.

Will production cut support prices?

Market holds a mixed view on rising steel prices and production cut in China. Some feel, Chinese steel prices likely to remain strong owing to capacity cuts and improved domestic demand.

But some feel, capacity cut is an over rated statement and its impact will not be as severe as it is being projected.

According to CISA (China Iron and Steel Association), “Steel products’ price surge is not due to strong demand or inadequate supply but speculative trading by some unscrupulous market players.”

Government policies on steel overcapacity reduction, elimination of inferior steel and environmental protection have been over-interpreted and even misunderstood by the market.”