Indian billet export market worsened further and trade has come to a near halt as buyers from the Asian region heard bidding at lower levels or pulling back bids, SteelOrbis learned from trade and industry circles. At the same time, despite some slight weakening in the local Indian market, prices there have still been much better than in the export market.
At least two private mills were in the market, offering 20,000 mt and 15,000 mt for spot billet sales, but since rare bids have come down to $450-460/mt FOB against a tradable level of $470-480/mt FOB prevailing a week ago, no new deals have been done. These levels are much lower than a deal concluded at $485/mt FOB, as reported a week ago.
Bearish sentiments also were aggravated by speculation that an export tender floated by the government owned mill RINL this week could either be deferred or cancelled due to low bids.
Indian producers are still considering export prices at below $500/mt FOB as not economically efficient, taking into account that the local tags in India are at higher levels. Even despite softening on local merchant billet prices, they have been above $600/mt, including 18 percent GST. Billet prices lost around INR 800/mt ($10/mt) at INR 51,500/mt ($644/mt) ex-Mumbai and at INR 50,400/mt ($631/mt) ex-Raipur in central regional market. In the west of India the tradable level for local billet is INR 48,500-49,000/mt ($607-613/mt) ex-warehouse.
“All optimism of realizations firming up to levels of $500/mt FOB dissipated during the week. In fact, nervousness over finished steel prices in China following severe drought conditions in the market spread across the Asian region,” an official in a government run mill said.
“Buyers [from China] have sharply reduced the acceptable price below the $500/mt valuation of CFR basis and this is not workable for local Indian mills. Most key markets in Asia and the Gulf are once again moving into a strong oversupply zone and buyers are deferring deals anticipating further declines,” he said.
$1= INR 79.90
