Weekly: Global Billet Market Overview

This week, the global billet market was noted to be partial trade active. Except for Iran and Indonesia, all other billet exporting nations remained silent amid the increasing intensity of COVID-19. Iran was reported to book billets in Asia and MENA region while Indonesia booked to China.

Trades are coming back to routine in China as the intensity of the epidemic is getting low. The clues can be witnessed by improving the domestic steel market of the country. According to Mysteel, as of 08 Mar'20, over 58% of construction projects nationwide including both real estate development and infrastructure projects after the prolonged Chinese New Year holiday have resumed now, China's Ministry of Housing and Urban-Rural Development (MOHURD) reported. This will pose a better recovery opportunity for the Chinese steel market.

CIS-CIS billet export offers reported a slight decline this week. The billet export assessment from CIS nations is at USD 385-390/MT, FoB Black Sea, down by USD 5 W-o-W. Recent plunge in the exchange rate of Ruble against USD has resulted in a decline in Russian billet export prices. Ruble is trading at around RUB 73 against USD versus RUB 64 a month back

Iran-This week, the Iranian billet export market was reported trade active, as the country was noted to have billet bookings in Asia and MENA region. However, billet export offers fell marginally with the deals.

-- SteelMint's assessment for billet export offers from Iran is at USD 380-385/MT, FoB Iran, down USD 5-10/MT, against last week. While domestic billet offers in the country are at IRR 52,600/kg, including 9% VAT.

-- The country was noted to have billet bookings in Asia and MENA region. The booking was made in 2 lots; 10,000 MT for Asia and 30,000 MT for the MENA region and the deal value for both the lots was reported to be USD 385/MT and USD 382/MT respectively on FoB Iran basis.

-- Meanwhile, one of country's leading billet exporter; KSC did not conclude 30,000 MT bloom export tender, floated last week. Amid disparity between bids and offers, the company did not conclude the tender, SteelMint learned from reliable sources.

-- The epidemic of COVID-19 is getting further radial in the country, with every passing day. The event has dried up the business activities in the country, most of the ground borders have been closed and exports have been put up on halt for an indefinite period, an Iran based reliable source reported to SteelMint.

India- Rashtriya Ispat Nigam Limited (RINL), state-owned steel maker under the Ministry of Steel, had invited an e-tender for the export of 40,000 MT Bloom and 20000 MT Billets for end Mar'20 shipment. The tender due date was on 03 Mar'20 and offer given by the bidder had validity until 10 Mar'20.

-- According to reliable sources report to SteelMint, the company has canceled the tender owing to lower bids than expectations. If trade sources are to believe the tender fetched bids at around USD 380-385/MT, FoB for 150*150mm, whereas the company's expectation was around USD 395-400/MT, FoB.

SE Asia - SteelMint's assessment for SE Asia billet import at USD 400-410/MT, down USD 5 against last week.

-- Formosa Ha Tinh Corporation (FHS)- Vietnam's largest steel manufacturer of the country has announced its billet offers. The price offered for billet by the company is reported to be USD 404/MT, CIF North Vietnam and that too for South Vietnam is reported to be USD 409/MT CIF, down by USD 14/MT, against last month.

-- Meanwhile, the Indonesian domestic billet offers were reported stable unlike the imports and are standing at IDR 7000/MT, tax-inclusive, identical as last week.

-- After remaining stable for the consecutive weeks, SE Asia billet import offers dropped sharply amid the increasing intensity of the epidemic of COVID-19.

China-In recent, China was reported to book 60,000 MT billets from Indonesia. The deal value was reported to be between USD 405-410/MT, CFR China and the shipment is scheduled for Apr'20.

Looking at the current deal; assuming deal value to be USD 405/MT. (USD 405 x currency rate 6.9 x 1.02 import tax x 1.13 VAT) + RMB 35 (logistic cost) = RMB 3,298/MT approximately.

While, the Chinese domestic billet prices are standing at RMB 3,130/MT, 13% VAT inclusive. Although, the current domestic billet prices in China are quite reasonable than imports. But considering the recovering rate of the Chinese domestic market, the marketers believe the above-mentioned import deal is a good move.

Global billet price assessment:

Source: SteelMint Research