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Weekly: Global billet market overview

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BigMint Bureau

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8 Aug 2020, 13:17 IST

The global billet prices were reported to have witnessed a rise for the second consecutive, with sizeable billet volumes being booked by China from India and Vietnam. The price hike was supported by increased Chinese rebar futures. This week, the steel futures were noted to have settled at RMB 3832/t, up RMB 55 against last week's closing. The hike in Turkey's imported scrap prices has also supported the global billet price rise.

CIS- The billet export offers from the region were reported to have witnessed a marginal rise this week, on increased Chinese rebar futures, and are standing at $390-395/t, FoB Black Sea. Decent bookings for multiple destinations were reported from the region.

India- SteelMint assessed Indian billet (150*150mm) export price at $395-405/t, FoB India.

An Indian state-owned mill likely booked 120,000 t blooms at $395-400/t, on FoB India basis, via export tenders. The booking was made in two lots of 60,000 t each. However, the payment terms of one of the lots were 100% advance and so has fetched a slightly lower price than the other one. Shipments of both the cargoes are expected on 30 Sep'20 with China as the likely destination.
An export tender for 125*125 mm billet for sale in SE Asia is still under negotiation. However, the result of this tender could not be confirmed at the time of publishing this report.
Chinese bids for imported billet have not moved higher in line with an increase in rebar futures and were mostly unchanged this week. Bids are currently at $415-420/t, CFR China, for Indian billet. Few Indian mills are also targeting $430/t CFR China levels for billet export.
Indian mills may continue to focus on domestic markets due to the sharp hike in domestic prices and offer fewer cargoes in export markets.

Iran- SteeMint's assessment for Iranian billet has moved up by $5/t w-o-w to $390-395/t, FoB Iran.

Iranian billet export offer prices gained on the back of mills' disinterest in offering too much volumes in overseas markets as they are booked until Oct'20.
Trading in export cargoes was quiet this week compared with active trading last week.
Resumption of billet supply at the Iranian Mercantile Exchange (IME) after a two-week pause also squeezed export volumes, supporting FoB prices.
Further price gains in the export market may not be sustainable, said an executive with Iran's market research company, Planner.
Chinese bids for Iranian billet are currently at around $415/t, CFR while SE Asian countries are bidding at $405/t, CFR levels, because of slightly lower freight than China.
South Kaveh Steel Company (SKS) floats 30,000 t billet export tender- A leading billet exporter, SKS, has floated an export tender for 30,000 t for end-Sep'20/early Oct'20 shipment. The company is expecting bids at $395/t, FoB Iran.
Domestic billet prices witness a sharp drop in recent trades at IME- Iran's domestic billet prices have dropped by IRR 3527/kg ($37/t) in a trade event hosted by the IME on 4 Aug'20. Approximately, 90,900 t billets were traded at an average price of IRR 77,373/kg ($410/t). Mills were not offering billets at the IME over the past two weeks due to cost viability concerns.

SE Asia- SteelMint assessed billet offers in the SE Asia region at $420-430/t, CFR, unchanged from last week

The southeast Asian billet import market was stable this week amid few trades, with some support coming from a sharp increase in China's rebar futures.
China's rebar futures increased by RMB 55/t during the week, resulting in a marginal increase in the billet import offers in the region. However, the bid-offer spread widened this week.
Vietnam likely booked 30,000 t Chinese billet at $430-435/t, CFR for Oct'20 shipments, up by $10-12/t against last week's booking.
Import offers of non-Iranian billet in the region were at $425-430/t, CFR while Iranian billet was offered at $415-420/t, CFR. However, bids were at $420/t, CFR levels for non-Iranian billets and below $415/t, CFR for Iranian billets. Billet export offers from SE Asian mills were at $430-435/t, CFR.
In near-term, Chinese buyers may prefer non-ASEAN mills for billet buying, despite a 2% import duty due to the smaller lead time than ASEAN mills

China- This week, Chinese domestic billet prices closed with a hike of RMB 70, against last week's closing. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,460/t ($497/t) in Tangshan, inclusive of 13 % VAT. While the billet import prices in China were noted between $415-420/t, CFR, for non-ASEAN billets, unchanged against last week.

Global billet market snapshot-