Weekly: Global Billet Market Overview

This week, the global billet market was reported with mixed sentiments. Where the SE Asian billet import prices have witnessed a marginal rise due to increased Turkey’s imported scrap prices. The same in China were reported to have fallen marginally as the futures in China were noted to witness a reasonable drop this has created the disparity between bids and offers. Looking at the situation, CIS nations have marginally pull down their billet export offers for China and are currently at USD 385/MT, CFR. However, even then, the Chinese buyers are resisting to the CIS current offer levels and are bidding at USD 380-382/MT, CFR.

However, India and Iran have not pull down their offers. Where billet export offers from India were noted stable. The same from Iran were reported to witness a rise of USD 5-10/MT.

CIS Nations- The billet export offers from the region were noted to witness marginal drop USD 5/MT, to reach USD 350-355/MT, FoB Black Sea. This week, numerous bookings to China were noted from the region.

Iran- SteelMint assessment for billet export offers from Iran is standing at USD 350-360/MT, FoB Iran, up USD 5-10/MT, against last week.

*This week, Iran was reported to book approximately 65,000 MT billets to China, SE Asia, and the MENA region. KSC was noted to book 30,000 MT billets while ESCO booked 30,000 MT billets. However, there is a price difference of USD 10-12/MT in both the deals.

* ESCO’s booking was reported to conclude in two lots, 25,000 MT to MENA region and 10,000 MT to the SE Asian region. The average deal value for both the lots was noted to be at USD 350/MT, FoB Iran.

* While KSC booked a complete 30,000 MT lot to China at USD 360-365/MT, FoB Iran for Jul’20 shipment.

*KSC was able to fetch a high price than ESCO because, the company has concluded the deal post-political Beijing political conference, and as it was foreseeable, the billet import offers in China witnessed a sharp hike, post-conference. However, the hike did not last for much longer, as the futures are noted to witness a reasonable drop. The event has pulled down the Iranian billet prices in China. Currently, the bids for Iranian billet in China are at USD 375/MT, CFR levels, trade sources reported to SteelMint. Also, the Chinese domestic billet prices have come down to RMB 3,240/MT ex-Tangshan, including VAT against last week’s closing of RMB 3,270/MT.

*Meanwhile, the domestic billet prices in the country have witnessed an acute rise for the consecutive week. This week, approximately 145,000 MT billets were reported to be traded on IME; Iranian Mercantile Exchange, at an average price of IRR 58240/kg, up IRR 6900/kg, against last week. Sources mentioned, “Since, all the deals of the second and third week of this month were canceled, the supply-demand gap had got widen” and was the reason for price hike in the domestic market.

India- SteelMint assessment for billet export offers from India is standing at USD 375-380/MT, FoB India, identical as last week.

*This week, an Indian mill was noted to float 30,000 MT bloom tender for size 150*150mm and 3SP/4SP grade. The shipment is scheduled for 10 Jul’20 and the last date for bid submission is 04 Jun’20. While the tender is expiring on 09 Jun’20.

*Recently a bloom export tender floated for 30,000 MT quantity and 150*150mm size and grade 3SP/4SP and the shipment was scheduled by end-Jun’20. According to credible sources report to SteelMint, the tender witnessed a dull response. If sources are to be believed, the dull response was primarily due to the payment terms of the tender, which was noted to be 100% advance, and as per sources, the set base price was USD 375/MT, FoB basis.

SE Asia- SteelMint assessment for billet import offers in SE Asia is at USD 385-395/MT, CFR levels, up USD 5 against last week.

* The billet demand in the SE Asian region has started getting to normal, as most of the countries have gradually started lifting the lockdowns. The sources mentioned to SteelMint, that some buyers from the region are even ready to pay above USD 395/MT, CFR levels in the current situation.

* Vietnam was noted to book, approximately 60,000 MT billets to China at USD 390-395/MT, CFR. However, the billet export offers from Vietnam were noted at USD 400/MT, FoB Vietnam. While the domestic offers were reported at USD 395/MT, CIF.

China- The domestic billet prices in China are at RMB 3,280/MT ex Tangshan (including VAT), up RMB 10, against last week.

Outlook- As we approached the weekend, the steel futures in China were noted to witness a rise, and hence, the domestic billet prices could also increase. For instance, steel rebar prices on the Shanghai Futures Exchange, for October delivery, rose by 2.5% to reach RMB 3,579/MT. This may keep market sentiments supported in the coming week.

Global billet price assessment: 

Source: SteelMint Research