Several large local mills have attempted to nudge up ex-India billet prices for the second consecutive week citing rising input costs, and, despite landed prices moving even higher due to freight charges, the emergence of some deals has indicated that at least some buyers are beginning to accept the rise in prices, SteelOrbis learned from trade and industry circles on Wednesday, March 25.
Sources said that ex-India billet prices are quoted in the range of $470-480/mt FOB, up from $465-475/mt FOB a week ago, and trade activity has remained muted as sellers have been unwilling to adjust FOB prices to partially offer “comfort” to buyers for the higher freight impact on CIF (cost, insurance, freight)-based final sales contracts.
According to the sources, mills claimed that they have little headroom to adjust FOB prices as margins are already under strain from rising input costs, including energy.
Despite these headwinds, a sale of an estimated 30,000 mt was reported by an eastern India-based large mill to a trader at $470/mt FOB, sources said.
Another Odisha-based mill is heard to be in negotiations for 20,000 mt, targeting $475/mt FOB.
“We are not very optimistic for a revival of the semis market in the immediate term despite reports of a few deals going through. There is no definite guidance on logistical cost increases and a continued rise will impact demand across geographies. There is a lot of trade diversion. The drying up of ex-Iran volumes in the market has not tightened supplies. The present market conditions of steady supplies and rising costs will offer very strong headwinds for sellers to be able to pass on higher prices to their buyers,” an Indian source said.
Meanwhile, in the local market, billet trade prices have remained in negative territory as rolling mills have become cautious after the weakening of long product prices. Billet trade-level prices are up a marginal INR 100/mt ($1/mt) to INR 44,350/mt ($472/mt) ex-Mumbai, but have lost a significant INR 900/mt ($10/mt) at INR 40,550/mt ($432/mt) ex-Raipur in the central region.
$1 = INR 93.48
