Faced with declining prices both in the Asian and domestic markets and rising inventories, Indian billet exporters have dropped prices further, but no deals have been reported as differences between bids and offers still exist, SteelOrbis learned from trade and industry circles on Wednesday, June 22.
In view of the further fall in billet prices across Asia, tradable levels for ex-India billet on the sellers’ side decreased to $570-590/mt FOB, compared to $580-610/mt FOB last week, but, even though some private mills are ready to deal at these levels, customers have been asking for even lower prices.
The sources said that, while government-run mills have continued to stay away from floating any export tender for the entire current month, private mills’ offers have largely been ignored in the Asian and Gulf regions with buyers anticipating the downtrend will gain pace from the weakening of finished steel prices.
Buyers’ price ideas from Southeast Asia have come to $580-590/mt CFR this week, as SteelOrbis reported yesterday, while last week the market level was just below $640/mt CFR. In such conditions, Indian mills will have to drop prices to $550/mt FOB or below to be competitive, but again customers are likely to remain cautious while prices are going down so rapidly.
“It is important to note that Indian billet exports were down 12 percent in May on month-on-month basis and not a single deal was reported from the Asian region,” an official at a government-run mill said.
“Pressures on prices will increase going forward considering low demand for rebar during the monsoon season and the further rise in billet inventories and pressure to increase overseas sales. But the challenge is that lower prices are failing to induce buying when prices are in a prolonged freefall across key markets,” he said.
Meanwhile, the downtrend has continued unabated in the local billet merchant sales market. Billet trade prices are down INR 500/mt ($6/mt) to INR 45,800/mt($586/mt) ex-Mumbai and down INR 300/mt ($4/mt) to INR 43,600/mt ($558/mt) ex-Raipur in the central regional market.
$1 = INR 78.10