With local Indian billet prices falling to a five-month low, more sellers have entered the export market, thereby increasing domestic competition and exerting downward pressure on ex-India prices at a time when sentiments among buyers in key destinations have still been bad, SteelOrbis learned from trade and industry circles on Wednesday, May 10.
Ex-India prices have been reported in the range of $495-500/mt FOB, down from $500-520/mt FOB a week ago. Actual deals have been concluded at lower levels, with more private mills becoming active in exports and increasing competition on the supply side, while buyers in Asia and the Middle East have continued to dictate terms.
According to sources, a deal at below $500/mt FOB was heard from an Odisha-based integrated mill for delivery to a Singapore-based trading firm for onward sale, indicating a deepening of bearish sentiments.
Another eastern region-based mill has reported a trade for 20,000 mt of prime concast billet for delivery to Oman at around $500/mt FOB.
The negative mood among sellers was set early in the week when a government-run mill received the highest bid in its tender for 30,000 mt at around $495/mt FOB, while the expectations of the mill were $510/mt FOB minimum.
“There has been a perfect convergence of bearish market conditions both domestic and overseas. Local billet prices are plunging as secondary mills are dropping merchant purchases in view of declining rebar prices, forcing integrated mills to increase export offers. So selling is rising and demand is softening in most overseas markets leading to a complete buyers’ market,” an official at a government mill said
In the local market, the downtrend of billet merchant prices has accelerated, losing INR 1,700/mt ($21/mt) to INR 44,800/mt ($548/mt) ex-Mumbai and down INR 1,500/mt ($18/mt) to INR 43,300/mt($529/mt) ex-Raipur in the central region.
$1 = INR 81.80