Indian mills lift billets export offers on supply concerns

The uncertain market conditions amidst the ongoing crisis and high domestic offers following a hike in coal prices have encouraged Indian mills to hike their exports offers sharply this week. SteelMint’s bi-weekly price assessment for Indian billets exports (150*150mm, 3SP/4SP, BOF route) stood at $670/tonne (t) FOB on 01 Mar’22, up sharply by $20/t  w-o-w.

Export tenders in the pipeline:

• State-owned Vizag Steel has floated an ocean sale export tender for 30,000 t of steel blooms (150x150mm, 3SP/4SP grade) on FOB ST delivery basis against 100% advance payment terms. The due date for the tender is 3 Mar’22 and the delivery is scheduled for 20 Apr’22.
• State-owned Vizag Steel has floated two ocean sale export tenders for 20,000 t of steel billets (90x90mm, C20MMn Gr. A) and 5,000 t of wire rods (5.5-16 mm, SAE-1008/ 1010/1012/1012S /1018). The due date for both tenders is 4 Mar’22 and the delivery is scheduled for 20 April.

If sources are to be believed, Indian billets export tenders are likely to fetch active participation. Other private Indian mills are also targetting higher prices but no deals have been heard yet.

What factors have supported Indian billets export prices?

• Active deals from Turkey: Currently, the Mediterranean market is actively concluding deals at high price levels. As per sources, around 20,000 t of billets were booked yesterday from Turkey to Morocco at $742/t FOB. Prices have risen by $10-15/t against the closing of last week.
• Supply impacted amidst Russia-Ukraine crisis: The ongoing geopolitical tensions have impacted billet supplies from Ukraine. Ukraine exported near 7 mnt of billets in CY’21 while Russia supplies a significant volume of 15 mntpa. With sanctions in place, buyers are also skeptical to conclude deals.
• Chinese SHFE rebar futures up sharply, import market silent: According to data maintained with SteelMint, China’s SHFE rebar futures contract for May’22 delivery closed at RMB 4,860/t ($769/t) on 2 Mar’22, witnessing a significant w-o-w rise of RMB 74/t ($12/t). Also, the same witnessed an increase of RMB 23/t ($4/t) d-o-d.

SteelMint’s assessment of imported billets (150*150mm, 3SP) into China are at around $680/t, CFR, up $5/t, w-o-w.

As per sources, China is currently out of the billet imports market but is active in exporting both flats and longs to South East Asia, South America etc. with expectations that exports will increase in response to the Russia-Ukraine crisis.

Meanwhile, steel billets prices in China’s Tangshan rose by RMB 30/t ($5/t) to RMB 4,630/t ($733/t) on 2 Mar’22, inclusive of 13% VAT. However, the same fell by RMB 20/t ($3/t), w-o-w.

• SE Asia imported billets offers increase: SteelMint’s assessment of imported billets (150*150mm, 3SP) into the Philippines currently stands at around $725/t, CFR Manila, up by around $12-13/t, w-o-w. However, few offers from SE Asia are heard at around $750/t CFR but bids are low.

Outlook

India’s billets export prices are expected to remain at the higher side on optimistic demand outlook and amidst factors like rising freight rates, Russia-Ukraine crisis and decent domestic realisation. Already inflated crude oil prices and prevailing uncertainty in the market may also keep freight rates under pressure, SteelMint understands.