Bearish conditions have deepened for Indian billet export activity with Chinese importers shunning offers, while even sharp cuts in prices have failed to interest Asian buyers leading to a near standstill in trading activities, SteelOrbis learned from trade and industry circles on Wednesday, May 26.
Ex-India billet prices have declined to $610-640/mt FOB, down from $655-660/mt FOB last week, but buyers have not been willing to make any commitments, nor have sellers been willing to push deals at the current low levels.
Traders and officials at local steel mills said that the market mood has been impacted by the sharp fall in steel prices in China and buyers of semis are still waiting for a definite trend to emerge before estimating a workable price for concluding imports.
“There has been a drastic reversal in billet export markets. Buying in China has come to a grinding halt, upsetting the entire Asian region. Neither buyers nor sellers are sure of the new dynamics being played out,” an official from Steel Authority of India Limited (SAIL) said.
“Billet export is key for integrated steel mills to manage inventories and stocks considering low merchant activity in semis in view of the stress in the secondary sector. Stability has to emerge in China for Indian steel mills to return to the market, even if realizations are more modest compared to the beginning of the current quarter,” he added.
In the current conditions, the tradable price level for ex-India billet has been assessed by market sources at $605-610/mt FOB. The fresh tender by an Indian mill for 150 mm billet has not been closed yet, according to sources. The target level of the mill is at the level of $640-645/mt FOB, but this would struggle to attract buyers.
