Ex-India billet prices have been kept ‘notionally’ stable in the past week, even as most large mills stayed away from the export markets amid the further widening of the bid-offer gap as major destinations in Southeast Asia and the Middle East suffered the contagion effect of deepening pessimism in China, with buyers submitting very low unworkable bids, SteelOrbis learned from trade and industry circles on Wednesday, January 8.
Sources said that, while large government-run mills have continued to be absent from exports in recent months, some private mills which have attempted to test the market have been keeping offers stable at $480-490/mt FOB, but were rejected with bids reported to be at least $50/mt lower and considered by the sellers to be not serious.
The reference price for Indian billet has remained $460/mt FOB, considered to be the lowest possible level to be achieved from some seller needing to push volumes.
However, according to sources, even though in the local market the uptrend in billet trade prices has been reversed, the volumes traded continued to be robust and, with less pressure on inventories, integrated mills have been unwilling to get into a pricing battle with Chinese suppliers to push sales overseas.
“There are a lot of ex-China volumes flowing out at very competitive prices even though after the holidays buyers in key markets are largely absent. Even though some offers are too low, we do not think many deals are being closed at such levels either. The mood is just becoming very bearish,” an Indian source said.
“Indian mills do not need to fight on prices to sell overseas. Local Indian prices are easing but volumes are still good and the long products market is being sustained, offering support to secondary mills which are picking up good volumes of semis,” the source said.
Meanwhile, local billet trade prices have lost ground, but some traders and producers say this is a correction after prices had been up an upward trend over consecutive weeks. Billet trade prices are down INR 600/mt ($7/mt) to INR 42,300/mt ($495/mt) ex-Mumbai and are down INR 400/mt ($5/mt) to INR 39,250/mt($459/mt) ex-Raipur in the central region.
$1 = INR 85.50