Indian billet export shipments stable in Sep’20 at over 600,000 t

India’s billet/bloom export shipments during Sep’20 stood at around 670,000 t broadly stable against Aug’20 (600,000 t). China, Taiwan, Sri Lanka, and Indonesia stood as the major importers of the Indian billets. The exports to Taiwan and Sri Lanka have increased by nine and three folds, respectively, on rising demand. Notably, it was the for the first time in CY20 when Kenya booked Indian billets in Sep’20.

Exports to China dropped marginally- According to the port data maintained with SteelMint, Indian exports for China have dropped by ~14% (approximately 1-2 cargoes) during Sep’20. We see the following possible reasons for this drop-

• Indian private primary mills limiting the export allocations
• Reasonable offerings from Russia and Iran- During Aug’20, the Russian and Iranian billet import prices in China were $483/t, and $493/t, respectively, including 2% duty and 13% VAT. On the other hand, Indian imports were at $501/t, including 2% duty and 13% VAT.
• Also, during the period under consideration, the Chinese domestic billet prices were hovering at par with the Indian imports RMB 3410-3420/t ($490-500/t), ex-Tangshan, including 13% VAT.

The shipments from RINL, SAIL, and JSPL accounted for over 75% of total billet exports, data shows. The shipments from the state-owned mills like SAIL and RINL have seen an m-o-m rise of 78% and 57%, respectively. On the other hand, Indian private primary mills, have curbed the allocations for Ocean exports on improving realizations in the domestic market. For instance, In Sep’20, JSPL shipments dropped to 115,015 t from 178,054 t in Aug’20, registering a drop of 35% m-o-m.

Future Outlook:

Outlook on Indian billet export volumes for Oct’20 remains uncertain at the moment. As private mills are likely to further limit the exports on recovery in domestic demand. However, long steel demand recovery is comparatively slower than that of flats due to monsoons and labor availability impacting the construction sector.

On the other hand, Vizag Steel is likely to resume operations at its 3rd blast furnace in mid-Oct’20 which may lead to an increase in billet export allocations from the company.