Indian billet export prices climb to two-year high in recent tender

Indian billet export prices have soared in recent deals, going up by $25-30/t week-on-week (w-o-w) in a recent export tender hosted by a state-owned steel mill.

The tender was for 30,000 t of billets of 4SP grade for the end-Dec'20 shipment. According to sources, the company managed to achieve a price level of $475-480/t, FoB India basis. The shipment is likely to be scheduled for a South East Asian destination.

Indian billet export prices are hovering at over two-year highs, with similar levels last seen in Oct'18, according to SteelMint data.

SteelMint Analysis

In conversation with trade sources, SteelMint dug out the reasons behind rising billet export price levels as reflected in the tender:

• Quicker delivery timeline: While CIS and Iranian exporters happen to be floating offers for Jan-Feb'21 shipments, the tender offered quicker Dec'20 delivery thereby fetching a higher price.
  
  
• Appreciating Yuan against USD: The Yuan is getting stronger against the USD, from RMB 6.69 on 1stNov'20, it settled at RMB 6.57 on 30thNov'20. The Yuan's appreciation has most likely increased the import parity in that country. Also, ever-rising domestic prices will support this event. Domestic billet prices in China saw a w-o-w rise of RMB 20/t ($3/t), and settled at RMB 3,610/t ($550/t) on 1stDec'20.
  
  
• Rising global scrap prices: On account of tight availability, imported scrap prices to Turkey increased by $50/the month-on-month (m-o-m) in nearly nine bookings confirmed by SteelMint last week. Prices are hovering close to their highest levels in 2.5 years. Such levels were last witnessed in Apr'18.
  SteelMint's assessment for USA origin HMS 1&2 (80:20) stood at $350/t CFR Turkey last week. Increased global scrap prices have propelled global billet prices further up, especially from the prominent scrap importing nations like Vietnam. Billet export offers from Vietnam are currently hovering at $490-495/t on an FoB basis for end-Jan'20 deliveries.
  
  

SteelMint's assessment for Indian billet (150x50mm, BF grade, FoB East Coast) stands at $475-480/t - up by $25-30 against last week.