This week, decent billet volumes were reported to be traded in the global billet market, with a marginal drop in the billet export offers. India continued to remain among top billet exporters. Where demand from China was slow, the SE Asian region was noted to book decent billet cargoes.
CIS- The billet export offers from the region were noted stable at $360-365/t, FoB Black Sea. During a conversation with a trade source, SteelMint learned “Since China has slowed down the billet buying from CIS nations, inventories are piling up. This could upturn the region’s focus towards Thailand, the Philippines, and Indonesia, etc. Although these countries don’t have that appetite as China, and CIS has to again rely on China for exports.”
India- SteelMint’s assessment for Indian billet (150*150mm) export stands at $375-380/t, FoB, identical as last week.
* India continues to remain active in the global billet market. In the past couple of weeks, the country was reported to book over 250,000 t billets, both government and private-owned mills were equally noted active in the global market.
* The bookings were mostly made for SE Asian and Far East Asian countries. While most of the deals were reported in the range of $370-380/t, FoB Indonesia was noted to book 20,000 t special grade billet cargo of quantity at $420-425/t, on CFR basis. However, few private mills like JSPL have mentioned, that they are now seeking to reduce billet exports to China, shifting its overseas sales efforts to other products.
Iran- SteeMint assessment for billet export offers from Iran has fallen to $365-370/t FoB Iran, down by $5 against last week.
* This week, the Iranian billet export market was noted silent due to the disparity between bids and offers. The mills are looking for $365-370/t, FoB levels, while buyers are bidding at $355-360/t, Fob levels. During a conversation with SteelMint, an Iranian market participant mentioned “$365/t, FoB levels seem difficult to achieve in the current situation $350-355/t, FoB levels are optimum for both sides.”
Owing to disparity, few mills have extended their export tenders, as they did not get the desired prices. The auctions are likely to get concluded if the disparity reduces, SteelMint learned from trade sources.
* Chinese bidders pulled Iran’s billet offers – Currently, China is bidding at $395/t, CFR for non-ASEAN and $405/t, CFR for ASEAN billets. With $25 freight from Iran to China and almost $2-5 other charges like money exchange and transfer, the cost of Iranian billet goes as high as $30. Also, Iranian material gets around $5 less than other origin products. So, considering no margin for the buyer, it exceeds correct bids from China for Iran Sep’20 delivery. A market participant mentioned “Since India is gifted with lower freight and better chance to sell by LC as well as it’s not sanctioned, this possesses better opportunity for Indian billet.
Domestic billet prices witness a fall in recent trades at IME: On 1 Jul’20, around 59,119 t billets were offered at IME. However, only 12,618 t billet trades were accepted, while the remaining 46,501 t lot was canceled by the government, as deal values of this lot have exceeded the price guidelines set by the government. The average traded price was noted to be IRR 64,878/kg, down IRR 3012/kg.
SE Asia- SteelMint assessment for billet import offers in the SE Asia region witness a downside marginal drop and is currently at $400-410/t, CFR, down $5 against last week.
* SE Asian billet market witnessed a marginal drop this week. Where Indonesia was reported to book 40,000 t billets from India, Thailand, and the Philippines were noted silent this week. Post India-Indonesia billet deal, buyers started bidding at slightly lower levels ($400/t, CFR), which has created a disparity between bids and offers and has led to limited billet imports for this week.
* Vietnam billet export offers drop- The billet export offers from the country witnessed a sharp drop and is currently at $395/t, FoB, down $5 against last week. However, the country was reported to book approximately 80,000-100,000 t billets for China in recent. According to sources reported to SteelMint, the deal value was noted to be at $408-410/t, CFR. The country is emerging as a net exporter of the billets.
* Meanwhile, Malaysia was also noted offering billets to China at $400-401/t, on CFR basis. However, SteelMint noted no trades.
Chinese domestic billet prices inch down – Chinese domestic billet market opened flat, i.e. at RMB 3,320/t post-dragon-boat festival. During the week, the prices were noted hovering between RMB 3,300-3,320/t and closed at RMB 3,300/t.
Global billet market snapshot:
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