Ex-India billet prices were kept nominally unchanged, but trade activity remained stalled as sellers paused submitting offers against backdrop of robust gains in local sales margins and rapid strengthening of finished steel prices, SteelOrbis learned from trade and industry circles on Tuesday, December 30.
While nominally ex-India billet prices were kept stable in the range of $435-440/mt FOB, large mills were not submitting offers amid pessimism over any improvements in sales and prices in January, while the local market for semis continued to show strong demand and prices in tandem with gains seen in rebar.
Local merchant sales price of billet recorded a sharp increase of INR 1,300/mt ($14/mt) at INR 42,000/mt ($467/mt) ex-Mumbai and up INR 1,400/mt ($16/mt) ex-Raipur at INR 39,100/mt ($434/mt) ex-Raipur in central region.
According to the sources, large mills were rapidly increasing captive conversion of semis as rebar price realizations were improving week-on-week and leading to tightening of supplies of billet for merchant sales. As a result, these mills are not willing to adjust ex-India prices to drive overseas sales with no improvements expected after the New Year holidays either in most sales destinations overseas.
“Buyers in overseas markets are not showing any sign of accepting higher prices. Neither are exporters under any pressure to adjust offers considering strong local sales. Large mills are allocating less volumes of semis for merchant sales or exports as their production of rebar is being ramped up,” a source from Indian mill said.
“We are keeping a watch of markets overseas but not submitting any offers. Overseas sales do not have much to offer us in terms of price. It is unlikely to change in the months ahead. Local market is offering a lot of opportunity to maximize margins,” the source added.
$1= INR 89.89
