Ex-India billet prices have been increased aggressively by large local integrated mills, following the sharp upturn in China and supported also by the tightening of local supplies, while some sellers have begun to target $500/mt FOB given the strength of the local market, SteelOrbis learned from trade and industry circles on Wednesday, October 2.
Ex-India billet prices have been hiked to the range of $465-490/mt FOB, up by $15-20/mt over the past week, following bids and trades at higher levels across destinations in Southeast Asia and the Middle East.
However, a section of market participants said that some large Indian mills are observed to be reducing export offer volumes in view of the sudden tightening of supplies in the local market and the improved margins for local sales, following the surge of prices in the rebar market.
An Odisha-based private integrated mill reported a trade for 20,000 mt at $470/mt FOB, but sources said that the initial offer for 30,000 mt was reduced as the producer had limited short-term inventories to meet end-of-October shipments overseas and to meet domestic demand at the same time.
Another eastern India-based mill has reported a bid at $465/mt FOB, while a government-run mill also received a bid for 20,000 mt in a tender at the same level, the sources said.
“Indian mills are able to secure far better prices on export sales as buyers are turning more active, taking their cue from improvements in China. However, both buyers and sellers are cautious in terms of volumes for differing reasons. Buyers are cautious on higher-volume deals, particularly for later deliveries after November, anticipating market volatility. Sellers, on the other hand, are tending to hold back volumes, expecting further upside gains, and are targeting $500/mt FOB,” a source at an Indian mill said.
“A more definitive clue on the upside potential will become clear once business activity resumes after the holiday in China,” the source said.
Meanwhile, in the local market, billet trade prices have gained further momentum with rebar prices consolidating at higher levels and with secondary mills aggressively restocking semis amid the tightening of billet inventories available at large integrated mills. As a result, billet prices have surged by INR 2,100/mt ($25/mt) to INR 43,700/mt ($521/mt) ex-Mumbai and are up by INR 1,600/mt ($19/mt) to INR 41,100/mt ($490/mt) ex-Raipur in the central regional market.
$1 = INR 83.80
