Weekly: Global Billet Market Overview

This week, the global billet market witnessed limited deals over decline in export offers from all the billet trading nations. The drop was primarily due to the marginal fall in global scrap prices. Also, Japan's active offerings from the past couple of weeks has suddenly created buoyancy in the global billet market. Amid decelerating domestic demand, due to the completion of Japan Olympics 2020 construction projects, the country is now shifting its interest towards the export market, especially in the SE Asian region. The Olympics projects were driving the domestic steel industry in Japan. Also, the Japanese mills are enjoying better margins in selling billets, rather than rolling it to rebar or wire rod, SteelMint learned from its reliable sources.

CIS-CIS billet export offers reported a slight decline this week. The billet export assessment from CIS nations is at USD 390-395/MT, FoB Black Sea, down USD 5/MT, against last week.

Iran-This week, the Iranian billet market remained silent. However, the export offers from the country were reported stable.

-- SteelMint's assessment for billet export offers from Iran is at USD 385-390/MT, FoB Iran, down USD 5/MT against last week.

-- One of Iran's major steel mill has floated an export tender for 30,000 MT bloom for Apr'20 shipment. The tender is heard to have received bids at around USD 385/MT, FoB, however, the mill is eyeing levels of USD 385-390/MT, FoB Iran. The tender is still under negotiation, as per reliable sources reported to SteelMint.

-- In order to protect, the domestic currency from further weakening against US Dollar, the Iranian government has imposed the guidelines on steel mills to sell the billets primarily in the domestic market, due to which mills have limited allocations for the export market.

-- Also, the country is soon planning to implement INSTEX; Instrument in Support of Trade Exchanges, which is a mechanism to facilitate non-USD transactions and non-SWIFT, in order to avoid breaking of U.S sanctions implementation. This news has managed to keep the export offers supported. During Nov'19, five European Union nations; Belgium, Denmark, Netherlands, Finland, and Sweden have declared in a joint statement to join the INSTEX mechanism for trade with Iran.

India- Vizag Steel; a state-owned steel maker under the Ministry of Steel, has invited a spot sale notice for the export of 30,000 MT bloom of size 150*150mm in the ocean market. The delivery is scheduled by 26 Mar'20 and the due date for the tender is 06 Mar'20.

-- Likewise, another government of India enterprise; Steel Authority of India Limited has floated an export tender for prime mild steel non-alloy concast blooms. The tender quantity is reported to be 18,900 MT. The cargo will be shipped from the Haldia port. The tender put up is for size200*280mm offered from the IISCO steel plant. The last date for bid submission is 09 Mar'20 by 16:00:00HRS [IST].

SE Asia - SteelMint's assessment for SE Asia billet import is at USD 410-415/MT, CFR identical as last week.

-- Domestic billet offers of Vietnam were noted to have at USD 415/MT, CIF, down USD 5/MT against last week. Trade sources from Thailand highlighted that local scrap prices have dropped this week. Also weakening of currency (Thai Baht) against USD has made imported billets expensive.

-- Meanwhile, following the global trend, the Indonesian global scrap prices have also witnessed a marginal drop. The event has resulted in the drop of Indonesian billet prices, which are currently at IDR 7000/MT, tax-inclusive, down by IDR 200/MT against last week.

-- For the consecutive week, the billet import offers in the SE Asian region remained stable. The marginal fall of global scrap prices lowered the bids for billets. A couple of deals from Japan to the Philippines have tried to distress the market sentiments. Recently, Japan has booked two billet lots to the Philippines of quantity; approximately 12,000 MT and 10,000 MT. The deal value of both the lots was reported to be USD 408/MT, CFR and, USD 400/MT, CFR, respectively.

China-This week, the country's domestic billet market was settled at RMB 3,090/MT, ex-Tangshan, including VAT, up RMB 30/MT against last week. The country's market sentiments are recovering gradually.

Turkey scrap prices inch down

Turkish imported scrap prices have slightly moved down. SteelMint's assessment for the USA origin scrap HMS 1&2 (80:20) stands at around USD 277-278/MT CFR Turkey, down by USD 2-3/MT against last week's report.

Global billet price assessment:

Source: SteelMint Research