Ex-India billet prices have been pushed up again over the past week, with large and medium-scale secondary mills citing rising energy costs and the fall in availability of domestic scrap supplies, but trade has been muted by buyers’ caution as regards accepting higher prices, compounded by higher freight rates, SteelOrbis learned from trade and industry circles on Wednesday, April 1.
Sources said that ex-India billet offers have increased by an average of $10/mt to the range of $480-490/mt FOB, while discounts do not exceed $5/mt. While trade activity in the Middle East has remained stalled, in Asian markets buyers have lacked the confidence to accept recent hikes in offers amid volatile freight rates.
Some market sources said that most buyers are looking for prices not above $460-470/mt, FOB and it is hard to make a deal when availability from China is stable and traders may be flexible.
According to an official at an integrated Indian mill, Indian sellers are optimistic on the price front, claiming that rising input costs will drive global prices higher, but buyers do not share such optimism, expecting inflationary pressures from rising energy prices will hit most economies with a demand depression as a collateral negative.
“Export activity for local mills will continue to be low priority. Mills are faced with tighter domestic supplies as captive conversion of semis to finished steel is being disrupted by disruptions of energy supplies. For secondary mills, availability of scrap is a challenge as scrap yards are faced with a shortage of gas for cutting operations,” an official at an Indian mill said.
“We have received some enquiries from Gulf Co-operation Council (GCC) markets. But finalizing sales contract based on CIF (cost, insurance, freight) prices is very difficult against backdrop of the war. We are cautiously optimistic,” he added.
Meanwhile, in the local market, billet merchant trade prices have surged reflecting tight supplies and expectations of further declines as energy supply disruptions mount. Billet trade prices have shot up INR 2,000/mt ($27/mt) to INR 46,350/mt ($494/mt) ex-Mumbai and have gained INR 1,250/mt ($13/mt) to INR 41,800/mt($445/mt) ex-Raipur in the central region.
