Ex-India billet prices have declined in reaction to the sharp slump in local prices and in trade volumes and since overseas buyers have only been willing to deal at lower prices, having multiple sourcing alternatives given the current competition, SteelOrbis has learned from trade and industry circles.
Ex-India billet prices have been lowered to the range of $475-490/mt FOB, down from the reference prices of $480-500/mt FOB last week. While last week offers at large mills were at $500-510/mt FOB, this week the mills have had to reduce their offers to at least $490/mt FOB, but sales at the lower prices have remained slow.
An Odisha-based private mill is heard to have been talking about a deal for 30,000 mt with a trading firm at $470-475/mt FOB, though this price is considered to be too low for most sellers.
An eastern region-based mill of a government run company is heard to have put up a spot export offer, setting a reserve price of $490/mt FOB on Monday, but there has been no confirmation about whether a deal has been concluded so far.
“Exports margins are very tight for most local mills, but sellers have very little option in the face of the prolonged downturn in local trade prices and volumes. Also, the large ex-China volumes available in key destinations point towards further declines in prices, prompting buyers to defer commitments,” a source at an Indian mill said.
“If you do not cut prices, you do not sell. This is holding true for both local and overseas sales, and unfortunately for large Indian mills,” they said.
Meanwhile, the downturn in the local Indian billet market has gained pace with trade merchant prices losing INR 1,800/mt ($22/mt) to INR 42,200/mt ($505/mt) ex-Mumbai and slumping by INR 2,500/mt ($30/mt) to INR 39,550/mt ($474/mt) ex-Raipur in the central regional market.
$1 = INR 83.50
