Ex-India billet prices have been pushed up by large mills amid rising costs of energy and imported raw material, but higher freight rates for most destinations have led to a cautious mood and, despite tighter supplies, buyers have been unwilling to risk the uncertainties involved in CIF (cost, insurance, freight)-based contracts, SteelOrbis learned from trade and industry circles on Thursday, March 19.
Sources said that ex-India billet prices have increased for the second consecutive week by around $5-10/mt to the range of $465-475/mt FOB, while trade activity has been muted as higher freight rates have made Asian buyers cautious about concluding bookings.
Even though there has been some tightening of supplies in key destinations with the absence of ex-Iran volumes coming into the market, very high volatile freight rates and sellers being unwilling to adjust FOB prices amid rising energy costs have made finalizing CIF (cost, insurance, freight)-based contracts extremely challenging.
Despite these challenges, an eastern India-based integrated mill was in negotiations with a trader at $465-470/mt FOB, the sources said.
“There are much tighter supplies across Asian markets. But the biggest challenge is the highly volatile freight rates being quoted by shippers. Sellers are not willing to adjust FOB prices, citing rising costs while buyers are extremely cautious over the high and volatile freight rates. This is keeping buying activity at lower levels,” an Indian source said.
Meanwhile, the local merchant trade billet market has showed signs of cooling down after recent surges. Trade-level billet prices are down INR 1,250/mt ($13/mt) to INR 44,250/mt ($477/mt) ex-Mumbai and have lost INR 750/mt ($8/mt) to INR 41,450/mt ($447/mt) ex-Raipur in the central region.
$1 = INR 92.71
