Monthly Archives: May 2020

South African Thermal Coal Prices Rise amid Increased Trade

The South African sea-borne non-coking coal prices that had been falling over the past two months finally moved up in May. From its lowest at USD 49/MT, FoB basis in April (for May shipments), the API Index benchmark price has now touched a mark of USD 59/MT for June shipment.

Offers for RB2 grade coal (5500 kcal/kg) is assessed at USD 41/MT, FoB basis for June shipments. The freight between the two countries is around USD 9.5-10/MT for capsize vessels.

Cement & sponge iron industry resume buying

The vessel line-up data maintained with CoalMint indicates that South Africa’s thermal coal exports to India in the past one month have surged dramatically from 0.17 MnT in last week of April to 0.64 MnT in the third week of May, with the highest bookings being made by traders followed by sponge iron manufacturers.

South African thermal coal’s key consumers in India – cement and sponge iron sector, saw a gradual pickup in their demand and production in May due to considerable easing of lockdown restrictions in the country.

Cement: Market sources revealed that almost all the cement manufacturing companies have resumed their operations (at 45-50% capacity) as the domestic cement demand in India improved from various sectors – infrastructure, retail, rural market, road works (especially in Karnataka and Eastern India) and theNational Highway projects to be completed before the monsoon.

Sponge iron: In case of sponge iron, Central India’s one of the largest merchant sponge suppliers, Bajrang Power was the largest buyer of South African thermal coal in May as it had resumed operations towards April end, post-closure for a month. Apart from this other sponge iron units in India also slowly resumed their operations leading to increased thermal coal imports.

Positive outlook

During April, when thermal coal trade between India and South African coal was almost negligible, the country’s miners had diverted their supplies to Vietnam as its economic activity was relatively resilient compared to other countries.

However, now it seems that Indian buyers are once again at the forefront of buying South African thermal coal and will continue to do so with a further pick-up in industrial activities expected. Given the positive outlook, market experts believe that S. African thermal coal prices are unlikely to fall back to the lockdown levels.

 

India: Low-Grade Iron Ore Fines Export Prices Up in Recent Deals

Indian low-grade iron ore fines export prices increased further by USD 1-2/MT towards weekend compared to price assessment made in mid of this week. However on a weekly basis, prices increased by USD 4-5/MT and the current assessment for Fe 58/57% fines stands at USD 66-67/MT, CFR China. Following price surge in spot iron ore fines due to supply concerns, low grade fines export prices also witnessed increment.

Deals reported at increased offers-:

A global trading company concluded the deal for two-vessel of low-grade fines (Fe 57%) at around USD 66-67/MT, CFR China this week. The material shipment is scheduled for Jul’20.

— In another deal concluded towards mid of this week, an Odisha based miner booked one vessel for low-grade fines (Fe 57/58%) for export at around USD 66/MT CFR China.

Spot iron ore fines price cross USD 100 on supply concerns-:

On Friday (29th May) spot iron ore prices rose to ten-month high over anticipated Brazilian iron ore supply disruption followed by strong demand and falling inventory at the Chinese ports. All these factors seem to be responsible for the price hike in the global market.

Chinese spot iron ore fines prices increased significantly by around USD 4/MT W-o-W yesterday i.e 29th May’20 to USD 100.90/MT, CFR China against USD 96.85/MT, CFR China on 22nd May. Similarly, in the last one-month spot prices went high sharply by around USD 16-17/MT compared with prices of USD 84/MT, CFR China on 4th May’20.

The concerns over coronavirus have been impacting the Brazilian supplies of iron ore cargoes amid rising COVID-19 cases at the iron ore mine in Itabira Brazil, owned by Vale, which may lead to operation suspension at the mine.

Port inventories in China continue to fall – As per data compiled by SteelHome consultancy, Iron ore inventory at major Chinese ports dropped to 109.5 MnT, a drop of 0.5 MnT till 28th May this week as against 110 MnT assessed a week ago. On a monthly basis, inventory at China port has come down to around 6.15 MnT against 115.95 MnT on 29th April last month.

 

Chhattisgarh: State Electricity Commission Lowers Load Factor Rebate; Tariffs to Increase

CSERC has today announced a rebate cut in load factor for state based steel mills for FY21, however basic tariff remains unchanged. For the purpose of calculating load factor rebate, on energy charges, available to ‘HV-4: Steel Industries’ category, the maximum prescribed load factor has been scaled down from load factor of ‘77% and above’ to load factor of ‘70% and above’. Rebate drop by 8% is equivalent to increase in tariff by INR 0.40-0.50/unit.

It is also to be noted that earlier subsidy of INR 0.80-0.90/unit, expired on 31 Mar’20.

 

China: Tangshan Govt Announces Another Round of Steel Output Curbs

A notice from Tangshan ecology and environment protection commission was issued on 30 May’20 to scale up measures to be taken in Jun in a bid to ensure improved air quality in Tangshan. To ensure measures to be effectively taken forward, the notice aiming at Jun air quality control become effective from 01-30 Jun’20. It emphasizes the necessity to take stricter measures applicable to relevant enterprises during heavy polluting weather when emergency response required.

 

Weekly: Global Ferrous Scrap Market Overview

Global scrap market witnessed a mixed trend this week. One hand Turkish mills went on a buying spree pre Eid as well as post Eid holidays amid firm prices, while South Asian markets observed slow trades on subdued demand, with stable to slight uptick being  observed in offers. Japan’s domestic rose significantly, following the export offers rally, while China’s domestic scrap observed price cut this week.

Turkey: Just after the Eid holidays, Turkish mills resumed imported scrap bulk cargo bookings, and numerous deals from US, Baltic and Europe origins were reported. The price differential between USA and Europe origin further narrowed, on tighter availability in the continental yards, in comparison to USA.

In the last 2 days, a 50,000 MT mixed cargo by a Canadian recycler being sold to Mediterranean mills with  25,000 MT HMS 1&2 (90:10), 10,000 MT Shredded and 15,000 MT P&S at an average price of USD 261/MT CFR. Additionally, 4 different mixed cargoes from USA, Baltic, Benelux and UK based suppliers were sold to 3 different Turkish mills, with HMS 1&2 (80:20) price being USD 252.5-253/MT in all the bookings.

SteelMint’s assessment for USA origin HMS 1&2 (80:20) stands at USD 254/MT CFR Turkey, stable against last week.

Japan: Japan’s Tokyo Steel announced a hike in its scrap purchase price twice this week, with bids rising by JPY 500-1000/MT (USD 5-9) each time at all of its five works. After the second price hike, the company is now paying JPY 21,500 /MT (USD 199) for H2 scrap delivered at its Tahara plant in Central Japan, while the new prices for H2 scrap delivery to Utsunomiya plant in the Kanto region and Okayama plant now stand at JPY 20,500/MT and JPY 19,500/MT respectively.

China: China’s Shagang Jiangsu Steel group has observed its first price cut this week for all grades of domestic steel scrap procurement by RMB 30/MT (USD 4) after four successive rice hikes were witnessed. The purchase price for HMS (6-10 mm thickness) has now stood at RMB 2530/MT (USD 353), inclusive of 13% VAT, delivering to headquarters works situated in Zhangjiagang North of Shanghai in China, in comparison with the last revision to RMB 2,560/MT on 12th May’20.

South Korea:  Imported scrap offers to South Korea moved up further for yet another week, rising by JPY 1000/MT for Japanese H2 scrap against last week closing. Dongkuk steel has booked for Russian A3 grade scrap at USD 249-250/MT, CFR South Korea, and it has moved up by USD 10-11/MT against previous bookings.

On the other hand, Hyundai Steel has bid this week for Japanese H2 scrap at JPY 23,000/MT (USD 214), FOB Japan. Whereas, Japanese suppliers were quoting more than JPY 24,000 /MT (USD 223).

India: This week, Indian steel market moved further ahead as more steelmakers resumed their operations in the different regions. However, imported scrap trades remained very limited, as most buyers are at least a couple of weeks away from making fresh bookings for July shipments.

SteelMint’s assessment for Shredded 211 stands at USD 276-280/MT CFR Nhava Sheva, CFR, almost at the same levels as the previous week, with marginal downslide. Although inquiries by buyers were witnessed, no major transactions were reported. Bushelling scrap bundles from Australia and the UK were reported at around USD 298-300/MT CFR.

HMS 1 from South Africa were reported at around USD 262-263/MT CFR, while HMS 1&2 (80:20) offers were witnessed at around USD 253-255/MT CFR. Few trades of small quantities for HMS have concluded 5-6 days ago, however, in recent days, buying activity was silent.

Bangladesh:  Imported scrap offers to Bangladesh remained limited and did not witness an uptrend this week. Trades were mostly not reported this week, as domestic shipyard scrap was available at a cheaper level and also currently low production levels in steel mills keeps demand low.

Shredded offers mostly remained out of the market on very low bids by mills, but few offers were heard in the market at around USD 286-290/MT CFR Chittagong. HMS 1&2 (80:20) was observed at around USD 255/MT CFR earlier in the week and moved towards USD 260/MT CFR mark by week closing.

Pakistan: Steel market in Pakistan mostly remained quiet earlier this week on Eid celebration, however, imported scrap offers continued to inch up slightly this week.

SteelMint’s assessment for Shredded 211 scrap in containers to Pakistan from UK/Europe now stands at USD 280-285/MT CFR Qasim, up by at least USD 4-5/MT against last week. Most fresh offers are being reported in the range of USD 282-285/MT CFR, while few Shredded deals in recent days were recorded at USD 279-280/MT CFR.

 

Weekly: Indian Steel Market Snapshot

Indian steel prices increased further throughout the week on active demand from the domestic & global buyers. This has resulted in limited inventories among producers along with sufficient orders for coming days.

As per SteelMint’s assessment, this week prices of Semi Finished steel products gained by INR 300-900/MT(upto USD 12) & Finished long products by INR 100-400/MT. However, domestic flat steel prices remained down trend and plunged about INR 500/MT (USD 7) during the week due to limited trade activities.

IRON ORE and PELLETS

Odisha based merchant miners have received decent response in iron ore lump bookings after the recent price cut announced.

OMC has scheduled its next iron ore lump e-auction on 1st Jun’20. The base price for the material offered from Koira mines was reduced by INR 450/MT, from Daitari mines reduced by INR 600/MT and that of Gandhamardhan mines by upto INR 350/MT.

— PELLEX stands at INR 6,000/wmt (DAP Raipur) in this week. Raigarh based pellet maker increased offers at INR 5,600-5,700 (Exw). Bellary based pellet makers have sold around 45,000 MT pellets at around INR 6,000-6,300/MT EXW.

— Few Pellet (Fe 64% grade with around 3% Al) exports deal concluded at USD 113-114.5/MT, CFR China. In another low-grade Fe 64% grade pellets with 2% Al concluded at around USD 107/MT, FoB India for the same June dispatches. However, SteelMint assessment for Fe 64% grade pellets with 3% Al stands stable this week at USD 111-113/MT, CFR China same against last week’s assessment.

COAL

Australian premium low-volatile (PLV) hard coking coal (HCC) prices have resumed their downtrend on lower offers due to weak physical demand seen in the Asian spot market.

The seaborne coking coal market saw ongoing negotiations in the premium hard coking coal segment, with sellers continuing to lower offers to attract demand from end-users. However, many buyers have been reluctant to procure seaborne cargoes in light of stringent port-clearance policies in China.

India-based steel mills have relatively high inventory levels at the moment, as the country has been on a lockdown since March 25. Latest offers for the Premium HCC grade are assessed at around USD 108/MT FOB Australia.

FERROUS SCRAP

Imported scrap offers to India remained stable on a weekly basis, while no major bookings were witnessed yet in the market. Although many mills in the country have started productions to some extent, most of them are at least a couple of weeks away from making fresh bookings for July shipments.

SteelMint’s assessment for Shredded 211 stands at USD 276-280/MT CFR Nhava Sheva, CFR, almost at the same levels as previous week. Although inquiries by buyers were witnessed & no major transactions were reported. Bushelling scrap bundles from Australia and the UK were reported at around USD 298-300/MT CFR.

Offers of HMS 1 from South Africa were reported at around USD 262-263/MT CFR, while HMS 1&2 (80:20) offers which were witnessed at around USD 255/MT CFR last week. Few trades of small quantities for HMS were concluded 5-6 days ago, however, in recent days, buying activity was silent

FERRO ALLOYS

— Silico Manganese prices fell throughout the week in both Raipur and Durgapur due to dull demand in the domestic and export market.

— Ferro Manganese prices decreased due to low demand in both the domestic and export market.

— Prices of Ferro Chrome increased in the domestic market owing to the increase in Chinese prices. Demand in the domestic market remains dull.

— Indian Ferro Silicon prices are stable despite dull demand in the domestic market. Meanwhile, the export market remained near to absent.

SEMI FINISHED

On a weekly basis, Indian Semis market showed improvement, in which domestic Sponge iron offers surged by INR 100-600/MT & Billet by INR 300-900/MT (USD 4-12).

— Sponge iron export offers surged by USD 5/MT to USD 270-275/MT CFR Chittagong, Bangladesh. The prices hike on account of increase in domestic offers, however no fresh deals reported for exports to Bangladesh due to festive mood.

— Pig iron prices up by INR 300-500/MT due to temporary supply shortage & improved demand in central & eastern India.

— Billet export offers through the mid scale mills increased to USD 370-375/MT ex-mill at Durgapur, equivalent to USD 400-405/MT CPT Nepal.

— Primary mills billet export offers increased by USD 10/MT to USD 380-390/MT EXW eastern India, equivalent to USD 400/MT CPT Nepal.

— Vizag Steel has invited spot sale notices for export of 10,000 MT Wire Rod and 30,000 MT Blooms in the ocean market. The last date for bid submission is 4 Jun’20.

— Jindal Steel offered steel grade pig iron at around INR 24,300/MT EXW, Raigarh.

— An Indian govt owned steelmaker has concluded export tender for 20,000 MT billet at USD 370-375/MT, on FoB basis.The cargo is likely to ship to Thailand from Haldia port and the shipment is scheduled for mid-Jul ’20.

FINISHED LONG

The Finished long steel market seems average trade volume considering current production level which is hovering around 70% across regions but future bookings are not upto the mark and price range up by INR 100-400/MT in few locations, as per weekly assessment.

It’s being observed among trade participants minor selling pressure might get placed in the near term amidst of amplifying production utilization. However, few trade associates based in specified regions shared limited workforce could affect production level.

— The trade reference rebar prices (12-25 mm) through midsized mills assessed at INR 34,800-35,000/MT Ex Raipur, INR 36,000- 36,300/MT Ex Jalna & INR 36,200-36,600/MT Ex Chennai.

— Raipur based heavy structure manufacturers have maintained trade discounts by INR 600-900/MT and current trade reference prices at INR 36,300-36,600/MT (200 Angle) ex-work.

— Trade discounts in Raipur wire rod are currently assessed at INR 500-700/MT and trade reference prices stood at INR 32,900-33,300/MT ex-Raipur and INR 33,000-33,300/MT ex-Durgapur, size 5.5mm.

FINISHED FLAT

Indian HRC prices fell by INR 250-500/MT this week in few major markets on the back of limited trades happening in the domestic market. Labour availability has continued to remain a major concern and also prevailing lockdown in India until 31st May’20, which may get extended further up to Jun’20 has continued to keep trades on the lower side.

SteelMint’s current assessment for HRC (IS 2062, 2.5 – 8 mm) for trade segment stands at INR 36,500-37,000/MT ex- Mumbai, INR 37,000-37,500/MT ex-Delhi & INR 38,000- 38,500/MT ex- Chennai. The CRC ( 0.9 mm IS513 GR) prices are assessed at INR 42,000-43,000/MT ex- Mumbai, INR 42,000-43,500/MT ex-Chennai & INR 42,200- 44,500/MT ex-Delhi. The prices mentioned above are basic, and extra GST @18% is applicable.

Market participants shared that “Current demand in the domestic market is around 20-25% and Indian mills shall review the current prices and offer discounts in Jun’20. Also, a few mills have exported nearly 70% of their production which may, in turn, impact domestic supplies in the near term”.

On the other hand, Indian steel mills are likely to announce the price revision in domestic flat steel prices for June deliveries shortly.

Reference Prices as on 30th May 2020 (Week 22)

Products Regions Taxes Prices in INR/MT W-o-W
Pellet Fe 63%, 6-20 mm Ex-Durgapur GST at 5% Extra 5,700 +200
Iron ore 6-40 mm, Fe 65.5% Chhattisgarh Excluding Royalty (15%), DMF &(4.5%), NMET(2%) and GST (5%) 2,250 0
5-18 mm, Fe 63%, DR Grade Odisha Iron Ore Index Inclusive of Royalty (15%), DMF (4.5%) & NMET (2%). GST @ 5% extra 3,450 -50
0-10 mm, Fe 63% Odisha Iron Ore Index Inclusive of Royalty (15%) , DMF (4.5%) & NMET (2%). GST @ 5% extra 1,900 0
Silico Manganese (60-14) Ex-Raipur Excluding GST 62,250 -2,000
Scrap HMS (80:20) Ex-Mumbai GST at 18% Extra 20,900 NA
C-DRI 80 FeM Ex-Raipur GST at 18% Extra 17,000 +400
P-DRI 80 FeM Ex-Raipur GST at 18% Extra 16,100 +600
Pig iron Steel grade Ex-Raipur GST at 18% Extra 24,300 +1,100
Billet 125*125 MM Ex-Raipur GST at 18% Extra 29,050 +850
Rebar (12-25mm) Ex-Raipur (Medium Scale) GST at 18% Extra 34,900 +400
Wire Rod (5.5 mm) Ex-Raipur GST at 18% Extra 33,300 +1,500
Structure ( 40 Angle) Ex-Mumbai GST at 18% Extra 35,500 +500
HRC (2.5-8 mm) Ex-Mumbai GST at 18% Extra 36,750 -375
CRC (0.90mm) Ex-Mumbai GST at 18% Extra 42,500 -500
HR Plate(5-10mm) Ex-Mumbai GST at 18% Extra 36,750 0

Prices are Ex-works, Exclusive of GST at 18%

Indian Export Reference Prices as on 30th May’20

Commodity Particular/Delivery Size and Grade Prices 1W 1M
Pellet FOB India 6-20 mm, Fe 64% 102.5 102.5 93
Scrap CNF India Shredded (Containers, Europe Origin), Europe 277 274 273
Billet FOB India 150*150, 3SP/4SP 378 375 357
Sponge Iron CNF Bangladesh Lumps, FeM 80, India 270 265 275
Pig Iron FOB India Steel Grade 303 305 285
HRC FOB India 2.5 mm, SAE1006 423 420 390

Prices in USD/MT
Source: SteelMint Research

 

Weekly: Chinese Steel Market Highlights

This week Chinese steel prices remained volatile amid bad weather conditions and mixed sentiments on the “two sessions”.

HRC export offers witnessed uptrend following gains in the domestic market. Rebar export offer remains unchanged amid higher gap between bids and offers. Coking coal price declined on lacklustre demand. Spot iron ore fines price hit a ten month high on supply concerns.

China spot iron ore fines price hit ten months high

Chinese spot iron ore prices witnessed at USD 94.6/MT towards the beginning of the week, increased to USD 100.9/MT, CFR China towards the weekend. The prices have picked up amid strong demand and Brazilian supply concerns.

Brazilian supplies of iron ore cargoes continued to remain affected amid rising COVID-19 cases at the iron ore mine in Itabira Brazil, owned by Vale, which may lead to operation suspension at the mine.

As per data compiled by SteelHome consultancy, Iron ore inventory at major Chinese ports dropped to 109.5 MnT, dropping off 0.5 MnT as against 110 MnT assessed a week ago.

Spot pellet premium up W-o-W-

Spot pellet premium for Fe 65% grade pellets assessed at USD 21.90/MT this week as against USD 20.15/MT last week. The prices have picked up due to the rising preference for low alumina pellet amid concerns from Brazilian low alumina supplies.

Spot lump premium rises-

Spot Lump premium witnessed at USD 0.1520/dmtu as compared to USD 0.1400/dmtu a week before. However, the preference for lump remains low due to approaching rainy season; this is due to the moisture of the lump is subjected to greater volatility which may create complications if it goes directly into blast furnaces. Also, there is a limited spread between pellet and lumps presently and with low steel margins, preference for a change in direct feed remains on the lower side.

Coking coal prices weighed down by slow demand-

Seaborne coking coal prices witnessed a downtrend on lower offers due to weak demand seen in the Asian spot market. The seaborne coking coal market saw ongoing negotiations in the premium hard coking coal segment, with sellers continuing to lower offers in order to attract demand from end-users.

However, many buyers have been reluctant to procure seaborne cargoes in light of stringent port-clearance policies in China.

India-based steel mills have relatively high inventory levels at the moment, as the country has been on lockdown since March 25.

Latest offers for the Premium HCC grade are assessed at around USD 108.00/MT FoB Australia which is USD 116/MT FoB basis.

Domestic billet prices up moderately-

The domestic billet prices in China stood at RMB 3,280/MT ex Tangshan (including VAT), up by RMB 10, against last week.

HRC export offers rise further-

HRC export offers were reported up by USD 5/MT on optimistic sentiments in the domestic market. Nation’s steel mills are enjoying a stable domestic demand from infrastructure and white goods sectors. Current week offer stands at USD 430-435/MT FoB China, which was USD 425-430/MT in the preceding week.

On the other hand, at the beginning of the week, a major Indian steelmaker has booked around 40,000 MT of HRC (SAE 1006, re-rolling grade) to China at USD 410-411/MT CFR basis.

Meanwhile, the domestic HRC prices were recorded at RMB 3,580-3,600/MT (Eastern China), up by RMB 20-30/MT as against RMB 3,560-3,570/MT (Eastern China) a week ago.

Rebar export offers stable on a weekly basis-

Nation’s rebar export offers continued to remain range-bound and stood at USD 445-455/MT FoB basis. However, the importers are bidding on the lower side.

On the other hand, the domestic prices fell by RMB 30/MT and stood at RMB 3,530-3,560/MT (Eastern China) as against RMB 3,560-3,590/MT (Eastern China). However, the fall in demand is due to the rainy weather in a few regions, which, in turn, resulted in a fall in prices.

Particulars

Currency Current Price Per MT

1 W

Spot Iron Ore Fines Fe 62%, CNF China USD/MT 101 98
Met Coke, 64%, FoB China USD/MT 272 272
Premium HCC, FoB Australia USD/MT 108 116
Premium HCC, CNF China USD/MT 124 127
Domestic billet prices RMB/MT 3,280 3,270
Domestic Rebar Prices (ex-warehouse Eastern China) RMB/MT 3,530-3,560 3,560-3,590
Rebar, FoB China USD/MT 450 450
Wire Rod, FoB China USD/MT 447 433
Domestic HRC Prices (ex-warehouse Eastern China) USD/MT 3,580-3,600 3,560-3,570
HRC, FoB China USD/MT 433 428
CRC, FoB China USD/MT 470 453
Plate, FoB China USD/MT 458 460

Source: SteelMint Research

 

India: SAIL Pig Iron Auction Receives Decent Response as Furnaces’ Resumption Nears

SAIL conducted an auction for 4,000 MT basic grade pig iron from its Rourkela Steel Plant (RSP). The auction received good response as the entire quantity was booked at INR 23,400-23,500/MT EXW. Bid price increased by INR 900/MT against last auction which was held on 23rd May’20 for 3,000 MT and was settled at a weighted average price of INR 22,600/MT EXW.

Sources mentioned that few more furnaces in central & eastern India are planninng to resume operations in the near short term which may raise pig iron demand further. This resulted in strong response in RSP auction.

In addition to this, recent hike in offers made by private pig iron producers has some how supported the auction. Offers of steel grade pig iron through the private producers is hovering at INR 24,300-500/MT EXW-Raipur, INR 24,100-24,300/MT EXW-Raigarh, INR 23,600-800/MT EXW-Bokaro, INR 23,700-24,000/MT EXW-Durgapur & INR 26,400-500/MT FoR Ludhiana.

 

Weekly: Global Billet Market Overview

This week, the global billet market was reported with mixed sentiments. Where the SE Asian billet import prices have witnessed a marginal rise due to increased Turkey’s imported scrap prices. The same in China were reported to have fallen marginally as the futures in China were noted to witness a reasonable drop this has created the disparity between bids and offers. Looking at the situation, CIS nations have marginally pull down their billet export offers for China and are currently at USD 385/MT, CFR. However, even then, the Chinese buyers are resisting to the CIS current offer levels and are bidding at USD 380-382/MT, CFR.

However, India and Iran have not pull down their offers. Where billet export offers from India were noted stable. The same from Iran were reported to witness a rise of USD 5-10/MT.

CIS Nations- The billet export offers from the region were noted to witness marginal drop USD 5/MT, to reach USD 350-355/MT, FoB Black Sea. This week, numerous bookings to China were noted from the region.

Iran- SteelMint assessment for billet export offers from Iran is standing at USD 350-360/MT, FoB Iran, up USD 5-10/MT, against last week.

*This week, Iran was reported to book approximately 65,000 MT billets to China, SE Asia, and the MENA region. KSC was noted to book 30,000 MT billets while ESCO booked 30,000 MT billets. However, there is a price difference of USD 10-12/MT in both the deals.

* ESCO’s booking was reported to conclude in two lots, 25,000 MT to MENA region and 10,000 MT to the SE Asian region. The average deal value for both the lots was noted to be at USD 350/MT, FoB Iran.

* While KSC booked a complete 30,000 MT lot to China at USD 360-365/MT, FoB Iran for Jul’20 shipment.

*KSC was able to fetch a high price than ESCO because, the company has concluded the deal post-political Beijing political conference, and as it was foreseeable, the billet import offers in China witnessed a sharp hike, post-conference. However, the hike did not last for much longer, as the futures are noted to witness a reasonable drop. The event has pulled down the Iranian billet prices in China. Currently, the bids for Iranian billet in China are at USD 375/MT, CFR levels, trade sources reported to SteelMint. Also, the Chinese domestic billet prices have come down to RMB 3,240/MT ex-Tangshan, including VAT against last week’s closing of RMB 3,270/MT.

*Meanwhile, the domestic billet prices in the country have witnessed an acute rise for the consecutive week. This week, approximately 145,000 MT billets were reported to be traded on IME; Iranian Mercantile Exchange, at an average price of IRR 58240/kg, up IRR 6900/kg, against last week. Sources mentioned, “Since, all the deals of the second and third week of this month were canceled, the supply-demand gap had got widen” and was the reason for price hike in the domestic market.

India- SteelMint assessment for billet export offers from India is standing at USD 375-380/MT, FoB India, identical as last week.

*This week, an Indian mill was noted to float 30,000 MT bloom tender for size 150*150mm and 3SP/4SP grade. The shipment is scheduled for 10 Jul’20 and the last date for bid submission is 04 Jun’20. While the tender is expiring on 09 Jun’20.

*Recently a bloom export tender floated for 30,000 MT quantity and 150*150mm size and grade 3SP/4SP and the shipment was scheduled by end-Jun’20. According to credible sources report to SteelMint, the tender witnessed a dull response. If sources are to be believed, the dull response was primarily due to the payment terms of the tender, which was noted to be 100% advance, and as per sources, the set base price was USD 375/MT, FoB basis.

SE Asia- SteelMint assessment for billet import offers in SE Asia is at USD 385-395/MT, CFR levels, up USD 5 against last week.

* The billet demand in the SE Asian region has started getting to normal, as most of the countries have gradually started lifting the lockdowns. The sources mentioned to SteelMint, that some buyers from the region are even ready to pay above USD 395/MT, CFR levels in the current situation.

* Vietnam was noted to book, approximately 60,000 MT billets to China at USD 390-395/MT, CFR. However, the billet export offers from Vietnam were noted at USD 400/MT, FoB Vietnam. While the domestic offers were reported at USD 395/MT, CIF.

China- The domestic billet prices in China are at RMB 3,280/MT ex Tangshan (including VAT), up RMB 10, against last week.

Outlook- As we approached the weekend, the steel futures in China were noted to witness a rise, and hence, the domestic billet prices could also increase. For instance, steel rebar prices on the Shanghai Futures Exchange, for October delivery, rose by 2.5% to reach RMB 3,579/MT. This may keep market sentiments supported in the coming week.

Global billet price assessment: 

Assessment Currency Price Levels W-o-W
150*150mm, FoB India USD 375-380 =
130*130mm, FoB Iran USD 350-360 +7
125*125mm, FoB Black Sea USD 350-355 -5
3sp, 150*150, CFR Manila USD 385-395 +5

Source: SteelMint Research