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Weekly: Global billet market overview

Global billet prices remained supported as the futures market remained bullish with Chinese buying turning active. Demand for billets is high in China at present on accou...

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17 Jul 2021, 15:57 IST
Weekly: Global billet market overview

Global billet prices remained supported as the futures market remained bullish with Chinese buying turning active. Demand for billets is high in China at present on account of the strictly enforced production cuts. The curbs aim to keep crude steel production at CY'20's levels of around 1 billion tonnes. China's daily steel output averaged 3.13 mn t over Jan-May'21, up 14.7% y-o-y. Production in H2 needs to be cut easily by more than 50 mn t. Local production cuts mean the Chinese mills will need to source semis from overseas. They are thus active in stocking up before the rainy season ends, when construction will resume.

Indian billet export index up by $10 - SteelMint's bi-weekly Indian billet export index moved up by $10/t to $613/t FoB India east coast, on active buying interest from China, which is a direct result of proposed steel production cuts in H2 CY'21.

Iranian billet export market cools off on power outages: The Iranian billet export market continued to remain quiet for yet another week. Increasing electricity issues in the country put a few billet tenders in negotiation mode and hence no firm conclusion in deals was reported.

Iran's leading steel mills like KSC and ESCO had floated export tenders for two parcels of 30,000 t of billets (130mm) for end-Sept'21 shipments. However, Iranian steelmakers reported having received bids at around $620/tonne (t) FoB. Bids remained supported on the back of rising Chinese steel futures.

In addition, Chadormalu had also floated an export tender for 30,000 t of billets but due to electricity issues, the tender hasn't been concluded yet.

SteelMint's bi-weekly export assessment for Iranian billets stood at $620/t FoB on 16 Jul'21.

Electricity issues have now started affecting the domestic market too. On the Iran Mercantile Exchange (IME), no trade has happened this week against around 89,600 t traded at an average price of 1,32,462 Rial last week. However, base price for billet has risen to 165,573 Rial this week.

Iran's steel exports up 55% in Q1: Iran's semi-finished exports during the first quarter of the current Islamic year (21 Mar-20 Jun'21) stood at 1.62 million tonnes (mn t), up by 55% y-o-y. Billets and blooms held the biggest share in semi-finished exports with an aggregate of 1.06 mn t, up 26% y-o-y. Exports of finished steel rose sharply by 125% y-o-y to 0.873 mn t.

SE Asia: Imported billet prices up on supportive global sentiments - South East Asia's imported billet prices remained supported as the futures market remained bullish with Chinese buyers turning active for bookings this week. SteelMint's bi-weekly assessments of imported billet offers in to South East Asia are currently at $695-700/tonne (t), CFR Manila, up by $4/t against the last assessment made on 13 Jul'21.

Vietnam billet export offers rise on improved Chinese bids: BF-route billet offers from the country increased by around $25/t, on a w-o-w basis. According to SteelMint's sources, BF-route offers are at $690/t FoB. The Vietnam government has proposed an export duty of 5% on billets exports, SteelMint learnt from an official notification. The country aims to ease domestic steel prices with the help of this move.

Chinese domestic billet prices rise tracking hike in futures- According to data maintained with SteelMint, the Shanghai Futures Exchange (SHFE) rebar futures Oct'21 contracts on 16 Jul closed at RMB 5,559/t ($859/t), up d-o-d RMB 13/t ($2/t). Tracking the hike in futures, domestic steel billet prices in China's Tangshan remained stable at RMB 5,140/t ($796/t) inclusive of 13% VAT on 16 Jul' 21.

SteelMint billet prices

 

17 Jul 2021, 15:57 IST

 

 

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