Ex-India billet prices have dropped down over the past week but the reductions have been termed “notional” in the market in the almost near absence of buyers amid pessimistic sentiments and cheaper alternatives available in most Asian destinations, SteelOrbis learned from trade and industry circles on Wednesday, April 26.
Ex-India billet prices have been reported in the range of $520-530/mt FOB as sellers reversed the failed contrarian strategy of the earlier week of hiking prices to $540-550/mt FOB.
Sources said that the attempt to stabilize export prices at higher levels could not be sustained by mills as the combination of the absence of buyers and local sales prices weakening was too strong and there was an increasing risk of an inventory build-up.
The current FOB prices translate to producers’ assessment of the market, taking into account the drop seen in major export markets like Asia and the Middle East, but the number of firm offers from India has remained limited.
In view of cheap alternative sourcing from China and Russia, acceptable valuations as reflected in a few bids received by Indian sellers have seemed to be below $550/mt CFR for most Asian destinations and hardly above $570-575/mt CFR for the Middle East.
There were unconfirmed reports heard in the market that a government-run steel mill floated an export tender for 20,000 mt of prime concast billet but cancelled it within three days anticipating a poor response, and this further aggravated the “bad mood in the market”.
“We can safely say that exports of semis will remain stalled for a long time. It is not an issue of price. There is just no demand in key markets and Indian sellers are not in a position to continuously reduce prices without impacting the viability of operations,” an official at a government-run mill said.
“Even our long-term customers in the Middle East are saying they are unlikely to make any commitments in the current quarter. We will just have to wait and watch for the future,” he said.
Bearish conditions have spread in the local market in India and recent gains have been wiped off even though trade volumes have improved gradually. Billet trade prices have lost INR 1,000/mt ($12/mt) to INR 47,500/mt ($580/mt) ex-Mumbai and are down INR 550/mt ($7/mt) to INR 45,800/mt ($559/mt) ex-Raipur in the central region.
$1 = INR 81.90