Indian billet exporters are heard to be planning an imminent price hike, taking their cue from positive changes in the global markets and from lower export allocations, following a strong rebound in their local market, SteelOrbis has learned from trade and industry circles.
Ex-India billet prices are assessed at $450-470/mt FOB, versus $450/mt FOB last week, but sellers have been holding back from submitting offers after a surge in domestic sales volumes and prices, which would in turn impact export allocations going forward.
The sources said that the mood in Asian destinations was “markedly better” following the economic stimulus announced in China, but Indian mills have been taking their time in submitting revised offers amid the revival of domestic demand and with sellers assessing the balance between exports and local sales.
“The sudden reversal of the downtrend has taken most local sellers by surprise. They are taking a brief pause before submitting revised offers. Our initial assessment is ex-India prices have headroom of $10-20/mt in the short term and, if consolidation is seen in Asia and the Middle East, we can see a price of $500/mt FOB by the end of October. However, the extent of the rise will be determined by the sustainability of the surge we see in local sales as producers will tend to meet domestic demand on priority basis,” an Indian mill said.
“We do not think that sellers will agree to sell at the bottom of the current price range. Hence, neither government mills or private producers have committed any volumes for overseas sales over the past week,” the sources said.
Meanwhile, in the local market the sustained pessimism and downtrend in the market for semis staged a sharp reversal catching both sellers and producers by surprise. Reflecting the surge in prices of rebar, billet trade prices gained INR 1,800/mt ($22/mt) to INR 41,600/mt ($496/mt) ex-Mumbai and surged by INR 2,100/mt ($25/mt) to INR 39,500/mt ($473/mt) ex-Raipur in the central region.
$1 = INR 83.60
