Ex-India billet prices have remained under strong pressure from the increased competition with China in the export market and from the downturn in local merchant sales of semis resulting from prolonged price declines in the long products market.
The ex-India billet reference price stands at $460-470/mt FOB this week, with the upper end slipping by $10/mt over the past week, but most bids have been at the lower end of the range or even below.
A government-run mill which held a tender for 30,000 mt of 150 mm billet early this week is reported to have received a highest bid of $458/mt FOB, against expectations of $465/mt FOB at the lowest, depressing overall sentiments.
However, Indian sellers including large private mills have continued to offer overseas against the backdrop of inventory pressures and low domestic sales. An Odisha-based mill has reported a deal for 20,000 mt of billet with a Singapore-based trader for onward sales, at $460/mt FOB, but market sources said that this price could be lower at around $455/mt FOB.
In the Middle East, negotiations were also held at not above $460/mt FOB.
“The export market for semis is worsening across most destinations in reaction to the nervous market conditions in China. Indian sellers have no option but to continuously adjust prices and keep pushing sales overseas given excess supplies and low prices in the domestic market,” a source said.
“If the global market continues to weaken and local sales do not pick up, we see the next export price touching $440-450/mt FOB,” the source said.
Meanwhile, following the sustained slump in the local rebar market, billet prices are also moving down in tandem. Billet trade prices have declined by INR 500/mt ($6/mt) to INR 41,000/mt ($490/mt) ex-Mumbai and are down INR 550/mt ($7/mt) to INR 38,750/mt ($463/mt) ex-Raipur in the central region.
$1 = INR 83.70