Global billet market: Indian mills enter the fray as domestic market goes sluggish

Indian mills turned active in the global billet market on the wake of increased production coupled with sluggishness in domestic demand. Mills have now increased their export allocations. In the past two weeks, approximately 150,000 t billets were offered for the export market of which 60,000 t were reported sold, a few lots (~30,000-50,000 t) are under tendering process, while the rest remained unsold.

Meanwhile, Indian billet export prices witnessed a further drop in a recently hosted tender by a state-owned mill. According to SteelMint sources, the mill reported having concluded the tender at $520-525/t, FoB India levels, down by around $15 against last week's tender. The private primary mills broadly remained silent, while secondary mills' offerings saw a sharp w-o-w drop. SteelMint's bi-weekly assessment for Indian billets (150*150mm, BF route, FoB East coast) is currently at $520-525/t, down by $10-12 against last week.

SteelMint's bi-weekly assessment for Indian billets (150*150mm, BF route, FoB East coast) is currently at $518-525/t, down by $12-15 against last week.

CIS- This week, CIS offers witnessed a marginal fall of $5 and are currently at $545/t, FoB Black Sea.

Iran: SteelMint's bi-weekly assessment for Iranian billets is $520-525/t, down by $10-15/t against last week

Iranian billet export prices witnessed a drop for the second consecutive week amid falling global scrap prices. However, no deals were concluded at the revised offerings.

On the other hand, the domestic billet demand witnessed a revival, as like the previous week, the IME prices were a function of 75% of the CIS prices (generally, it is 80% of the CIS price). The Iranian Government did this to encourage buying and to raise the demand. However, marketers believe that price reduction would encourage buying but it would not be correct to say that demand is rising. There is a high likeliness that buyers might have over-stocked the material amid reduced prices, SteelMint learned during conversations with Iranian market participants.

However, mills would still prefer the export market over the domestic, because of better price realizations. For instance, offers from the few leading Iranian mills were at $520-525/t, FoB. While in a recent trade event hosted by the Iranian Mercantile Exchange (IME), approximately 95,000 t billets reported were traded at an average price of IRR 104,984/kg (~$430/t), up by IRR 3,223/kg ($13/t). Even though the prices witnessed a sharp w-o-w rise at the IME, the spread between domestic and export offerings continued to be very high.

SE Asia- This week, SteelMint assessment for billet imports in SE Asia is $540-550/t CFR, down by $15-20 w-o-w.

SE Asia imported billet market remained silent this week, ahead of Chinese New-Year holidays supported by down-trending global scrap prices. The buyers preferred staying in a wait-and-watch mode, anticipating prices to fall further. On the other hand, sellers and traders are expecting prices to rise, post the Chinese New-Year holidays. The buyers' anticipation versus sellers' expectation has sustained the bid-offer disparity leading to limited trades. The imported billet offers were hovering at $545-555/t, CFR Philippines, while bids were ranging between $520-530/t, CFR.

Vietnam billet export offers down by $30-35 w-o-w- Vietnamese billet export offers witnessed a sharp drop of $30-35/t this week. The BF route billets were being offered at $530/t, FoB, while the IF route was at $520/t, FoB Vietnam.

Thailand's billet import price falls- The imported billet offers in the country were ranging from $550-560/t, CFR, down by $10-15 w-o-w, while bids were heard at $545/t, CFR levels.
Indonesia- An Indonesian mill reported having offered billets at $535/t, FoB.

We have also heard of Chinese billets being offered in the Philippines. However, we could not confirm this offer until the publishing time of this report.

Chinese domestic billet prices remained stable- This week, the billet prices in the Tangshan market (Northeast China) broadly remained stable, against last week. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,850/t ($595/t) in Tangshan, including 13 % VAT.

An Indonesian mill was heard to have sold one parcel to China at $540-545/t CFR China.