Weekly: Global billet market overview

The global billet prices saw a significant drop this week. However, sizeable billets reported having traded this week with a price drop of $30-40 amid sharply decreased global scrap prices. But the majority of the buyers are seen in a wait-and-watch mode until the Chinese New-Year holidays as they are anticipating a further dip in prices.

CIS- This week, CIS offers witnessed a further fall of $10-15 and are currently at $550/t, FoB Black Sea.

India- SteelMint’s bi-weekly assessment for Indian billets (150*150mm, BF route, FoB east coast) is currently at $530-535/t.

• Billet export prices saw a significant w-o-w fall of $35-40 in a recently hosted tender by an Indian state-owned mill. The mill reported having booked 30,000 t billets (150*150mm, 3SP/4SP) through a spot sale tender at $530-535/t, FoB for Mar’21 shipment, credible sources reported to SteelMint. Prices have come down by around $40 against its previous tender concluded in early Jan’21 at around $575-576/t FoB for mid-Feb shipment.
• The secondary Indian mills have turned active in the export market and are actively exploring opportunities for billet export after a continuous price drop in domestic prices.
• The high BF-IF route price spread led the secondary mills to increase their export allocations. However, we feel that the continuous falling global scrap prices will not let them enjoy the price realizations in the export market. It (falling global scrap prices) will create bid-offer disparity and could result in canceling the deals. Notably, we heard more about the offerings, but the contracts witnessed were limited.

Iran- SteelMint’s bi-weekly assessment for Iranian billets is $535-540/t, down by $20-25/t against last week.

• Iranian billet export prices witnessed a sharp drop in recently concluded tenders by the country’s two leading steel exporting mills. The continuous falling scrap prices pulled the Iranian billet export prices.
• Meanwhile, against the odds, two leading steel exporting mills- Chadormalu Mining and Industrial Company and Khouzestan Steel Company (KSC) managed to book 60,000 t billets. However, the bookings witnessed a price drop of $20-25 w-o-w. According to SteelMint sources, KSC managed to achieve price levels of $540/t FoB for the Far East, while Chadormalu concluded the tender at $530-535/t, FoB.
• Domestic billet trades at IME improve – On the other hand, the domestic billet demand saw a rebound this week. Around 107,000 billets were traded at the Iranian Mercantile Exchange (IME), at an average price of IRR 101,761/kg ($435/t). The offered quantity was 132,705 t.

• However, the marketers are not considering this week’s IME trades as a demand rebound. Because for this week, IME price was a function of 75% of the CIS price. Generally, it is 80% of the CIS price. The Iranian Government did this to encourage buying and to raise the demand. Over the past two weeks, limited or negligible billets were reported having traded at the IME.
• “Next week will be interesting to gauge the actual demand as people might have over-stocked owing to reduced prices”. SteelMint learned during conversations with market participants.

SE Asia- This week, SteelMint assessment for billet imports in SE Asia is $560-570/t CFR, down by $30-40 w-o-w.

• Imported billet prices in SE Asia witnessed a significant drop amid global downtrends and lower bids.
• SE Asian buyers are currently in a wait-and-watch mode until the Chinese New-Year holidays as they are anticipating a further dip in prices. We also learned that Indonesia has temporarily opted out from the market as local billets are reasonable and following the downward trend. An Indonesian trader shared this input with SteelMint.
• Vietnam- Following global trends, Vietnamese billet export offers witnessed a sharp drop of $ 15-20 this week. The BF route billets were heard being offered at $565/t, FoB, while the IF route was at $560/t, FoB Vietnam.
• Thailand- The imported billet offers in the country were ranging from $570-580/t, CFR, down by $20-25 w-o-w.

Chinese domestic billet prices increase by RMB 50/t- This week, the billet prices in the Tangshan market (northeast China) settled with a rise of RMB 50, against last week. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,860/t ($600/t) in Tangshan, including 13 % VAT.

Global billet market snapshot-