Ex-India billet prices improved visibly, and more Indian mills intended to offer overseas amid turnaround seen in China and more buyers willing to commit trades, anticipating that the market may well have bottomed out and poised for an upturn, SteelOrbis learned from trade and industry circles on Wednesday, August 28.
The reference price for ex-India billet was settled at $450/mt FOB this week with a few bids and deals reported at around this level, compared to $438-445/mt FOB.
According to the sources, Chinese speculators, who had aggressively sold billets during the prolonged downturn may be forced to cover their positions, leading to rise in price across Asian destinations and prompting actual users to restock semis ahead of further gains in price.
Sources said that a government mill, which held an export deal for 30,000 mt on August 26, received the highest bid of $452/mt FOB from a Middle East-based buyer, an improvement from $438/mt FOB bid, received for a similar tonnage early in the week.
The optimism likely prompted a seller to float another back-to-back export tender for identical tonnage to close on September 3.
An Odisha based integrated mill reported a trade for the Asian market for 20,000 mt at $448/mt FOB and another trade for undisclosed destination at $450/mt FOB, the sources said.
“These are early days and difficult to claim that the improvement will sustain. But there is a possibility of either tightening of supplies or at least balancing out of surplus in the market as mills in China are taking a pause in capacity expansion and this may lead to some normality on the supply side,” an Indian mill said.
“Hence we see some room for prices to go up and more Indian mills look at selling overseas with domestic steel price and demand weakening,” the mill said.
Such a forecast was justified by sustained losses suffered by billet in local merchant sales. Billet trade price lost another INR 400/mt ($5mt) at INR 41,000/mt ($489/mt) ex-Mumbai and down INR 400/mt ($5/mt) at INR 38,600/mt ($460/mt) ex-Raipur in the central region.
$1= INR 83.90