Weekly: Global billet market overview

This week, global billet prices have witnessed a rise due to increased global scrap prices. On the other hand, the Chinese rebar futures have sharply dipped till mid-week. However, towards the weekend, it started recovering and settled at RMB 3,665/t. The fluctuating futures have increased the bid-offer spread have resulted in limited billet trades during the week.

Along with India, all other prime billet exporting nations have curbed their billet export allocations on improving respective domestic demand, which was affected due to the COVID-19 outbreak. It has led to the limited availability of billets in the global market, which is pulling the global billet prices, supported by increasing global scrap prices.

CIS billet export offers up by $10-15-The offers from the region for a SE Asian destination saw a marginal increase and were at $410-415/t FoB (equivalent to $450/t CFR), up by $10, against last week

Indian mill books 90,000 t billet for exports- SteelMint assessment for Indian billet export offers (150*150mm) have risen by $5 w-o-w and are at $425-430/t, FoB India.

• Indian billet export prices have moved up sharply in recent deals. An Indian mill booked 90,000 t blooms through tenders floated for spot sale. The deals have been done in two lots, of 60,000 t (advance payment terms) and 30,000 t. According to SteelMint sources, the company managed to achieve the price levels of $425/t and $430/t, FoB India, for mid & end Oct'20, respectively.
  
  
• The other Indian primary mills continued staying out of the global billet market with a focus on the domestic market.
  
  

Iranian mills aiming for high prices in fresh export tenders- This week SteelMint assessed billet export offers from Iran to be at $405-410/t, FoB Iran, up by $5 against last week.

• Following the global trend, the billet export offers from Iran have witnessed an increase this week. The mills are targeting the price levels of above $415/t, FoB Iran. However, the bids for the Iranian billets have not risen in parallel with the offers remaining stable at $425-430/t, CFR amid falling Chinese rebar futures. In the past two days, the rebar futures at SHFE have dropped by RMB 30-50.
  
  
• During the conversation with SteelMint, the planner official said, "mills are targeting $415-425/t, FoB Iran, but it is not workable given the freight rate of over 30$ to China. And Chinese only bid 425 to 430 CFR for November and December products".
  
  
• Export tenders floating-
  • SKS's 30,000 t billet export tender- South Kaveh Steel, one of Iran's leading billet exporter, is offering 30,000 t billets through tender for end-Oct'20/early-Nov'20 shipments. According to data maintained with SteelMint, in previously floated tender concluded in mid-Aug'20, the company managed to achieve a price level of $396/t, FoB Iran.
    
    
  • KSC floats 30,000 t billet export tender- Khouzestan Steel Company (KSC), Iran's leading steel exporter, has invited the bids to export 30,000 t billets by end-Oct'20/early-Nov'20. The company's expectations are at a price level of $415/t, FoB Iran. In previously floated tender, the company managed to achieve a price level of $405/t, FoB Iran.
    
    
  
  
  
• Domestic billet prices rise in recent trades at IME- Iranian domestic billet prices have witnessed a decent rise in a recent trade event hosted by the Iranian Mercantile Exchange (IME). Yesterday, around 83,000 t billets traded at an average price of IRR 90,927/kg ($423/t), up by IRR 1,367/kg, against the previously concluded deals. According to market participants, there is no real demand in the Iranian domestic market. The majority of the demand is due to speculation. Since IRR is continuously falling against $, therefore people are exchanging their money with the steel commodities. Also, due to the Nima USD rate increase, the domestic billet prices are likely to go up next week.
  
  

SE Asia billet offers up- This week, SteelMint assessment for billet import offers in SE Asia have moved up marginally and is currently at $440-445/t, CFR, up by $5 against last week.

• The SE Asian billet import market remained silent this week, on dropped Chinese rebar futures. During 8-10Sep'20, futures came down by RMB 60. However, today, the futures gained momentum and witness an increase of RMB 25 to reach RMB 3,665/t. On the other hand, the import offers in the region have increased marginally against last week on rising global scrap prices, while bids were ranging from $430-440/t, CFR.
  
  
• The bid-offer spread has broadened again, which saw a contraction in the last week.
  
  
• Also, the domestic offers in some nations of the regions have reached par with the import offers. For instance, the domestic billet prices in Indonesia are at IDR 6700/kg ($450/t) ex-works, excluding taxes.
  
  
• Vietnam- This week, the billet offerings from the country have increased by $5 the country also booked a sizeable IF grade cargo at $450 CFR for China this week, SteelMint learned from sources.
  
  
• Billet imports in Indonesia rise by 37% in Jul'20-The billet imports in Indonesia during Jul'20 have registered a ~37% m-o-m rise to reach ~160,000 t from ~117,000 t in Jun'20. India, Russia, and Oman stood the prominent suppliers of the month. However, Russian imports in the country have dipped by ~57%, while at the same time, the Indian imports increased by four-folds during the period under consideration. According to market sources, due to lower freight, India stood the preferred destination for Indonesian buyers.
  
  

Chinese domestic billet prices fall sharply- This week, Chinese domestic billet prices settled with a sharp decrease of RMB 70, against last week's closing. The prices of commonly traded Q235 billet 150mm diameter were reported at RMB 3,420/t ($500/t) in Tangshan, inclusive of 13 % VAT. The bids for imported billet in China also saw a rise and were ranging from $435-445/t, CFR, for non-ASEAN billets.

Global billet market snapshot-

Outlook - Global scrap prices have slightly weakened towards the week close after Turkish mill booked a Baltic origin cargo at a slightly lower price. If billet demand turns low at high offers, it may lead to softening in billet export offers as well.