Ex-India billet prices have weakened amid low business activity in the Gulf, Asian buyers retreating expecting declines to gain momentum, and lower-than-expected bids received by a government-run mill, leading to an overall negative outlook prompting private mills to pull out of the market, SteelOrbis learned from trade and industry circles on Wednesday, March 29.
Ex-India tradable billet prices have been reported at $550-580/mt FOB with the midpoint at $565/mt FOB, sharply down from $580/mt FOB a week ago. The lower end of the range corresponds to rare bids, while the higher end represents the level that mills would accept in previous deals, but private mills were heard to be retreating from the market and not following up even the limited enquiries received.
But the most negative impact on sentiments was rendered by reports of an export tender of 30,000 mt held by a government-run mill, which has not been closed as it has received very low bids at below $550/mt FOB, significantly lower than the internal reserve price of the seller.
With Gulf business activity also at a low ebb and weak local price and higher supplies, local sellers have been unable to close deals even after small adjustments to sales prices, the sources said.
“Optimism over billet exports is over, at least in the short term. Finished steel prices are not performing as expected in the Asian region, particularly in China, and the impact is seen in lower interest in imported semis,” a steel sector analyst with a Mumbai-based financial advisory firm said.
“There is a lot of volume available locally in most Asian destinations. Indian sellers are not aggressive in pricing to push sales and prefer to move to the sidelines instead,” he said.
However, pressures were mounting in the local billet market with prices continuing to soften. Merchant billet prices have lost INR 1,000/mt ($12/mt) to INR 46,500/mt ($564/mt) ex-Mumbai and are down INR 500/mt ($6/mt) to INR 45,200/mt ($548/mt) ex-Raipur in the central regional market.
$1 = INR 82.40