India: Billet export market gains some momentum amidst improved Chinese buying interest

Indian billet export trade has gained momentum this week amidst improved buying interest from China.

A State-owned Indian steelmaker floated an export tender for spot sale of 30,000 tonnes (t) of steel blooms (150x150mm, 3SP/4SP grade). The tender was floated against 100% advance payment terms with the due date being 2 Sept'21. The shipment was scheduled within 45 days from the export agreement. According to market sources, the deal was concluded at around $590-595/t FoB.

SteelMint's bi-weekly price assessment for Indian billets (150mm, 3SP/4SP) exports stood at $600/t FoB east coast India on 3 Sept'21, a m-o-m drop of $18/t.

Also, a Brazilian mill has reportedly sold 40,000 t of steel billets to China at $668/t CFR last week. The shipment is likely for end-Sept'21, sources informed SteelMint.

It is important to note that private players, in recent times, are not actively offering billets for exports whereas public sector units (PSUs) have their billet export tenders in the pipeline. Also, PSU steel major Steel Authority of India (SAIL) floated an export tender for 16,200 t of concast billets (4SP/5SP, 125mm) from Durgapur Steel Plant in West Bengal, as per latest reports. The cargo is scheduled for end-Oct'21 shipment with the tender due on 7 Sept.

The reason behind resumed Chinese buying could be because of expectations of an improvement in downstream steel demand with the onset of peak season and surge in coking coal prices. Australian premium low-volatile (PLV) hard coking coal (HCC) prices increased by $5/t d-o-d to $269/t FoB on 3 Sept'21, backed by strong demand amidst persistent supply tightness, alongside fresh transactions concluded at higher levels.

Domestic billet prices in China up RMB 90/t ($14/t): Steel billet prices in China's Tangshan rose w-o-w by RMB 90/t ($14/t) on 3 Sep'21 to RMB 5,040/t ($781/t) inclusive of 13% VAT.

Chinese re-bar futures close higher: According to data maintained with SteelMint, China's rebar futures contract for Jan'22 delivery closed at RMB 5,408/t ($838/t) on 3 Sep'21, a sharp increase of RMB 186/t ($29/t) w-o-w.

However, trader sources highlighted that issues related to increased port congestion in China and LC-related issues with traders have still kept fewer market participants away from the market.

India, one of the leading exporters of steel billets, recorded a 33% m-o-m rise in its billet export volumes in Jul'21. The volumes stood at 0.73 million tonnes (mn t) in Jul'21 as against 0.55 mn t in Jun'21, as per customs data collated by SteelMint. Indonesia, China and Nepal were the key importers of steel billets from India. India's steel billet exports in Jan-Jul'21 stood at 3.5 mn t.