Ex-India billet prices have been kept stable over the past week but, despite signs of possible demand at lower levels, sellers were unable to narrow the bid-offer gap to successfully push sales, owing to the rising local costs of production, SteelOrbis learned from trade and industry circles on Wednesday, April 22.
Sources said that ex-India billet prices have been maintained at $480-490/mt FOB, with bids coming in from some Asian markets, indicating some re-emergence of buying interest.
But buyers have remained price-sensitive, with bids reported at lower levels of $460-470/mt FOB and failing to result in any successful deals. It was pointed out that, despite big declines seen in the domestic semis market, in tandem with the fall in finished steel prices, sellers have been unwilling and unable to adjust offers to push sales overseas, in the face of steadily rising production costs, particularly the high prices of energy.
“Producers are in a twin-bind both on the domestic and export fronts. While demand is not supported by a strong price, the cost of production is rising, leaving very little pricing power for sellers of semis. Weak prices and the rising costs of productions are difficult market challenges,” a source at Jindal Steel Limited said.
“It is not prudent to push discounted sales either locally or overseas. Mills have to take a strategic pricing call on these challenges,” he added.
In the local market, semis have come under renewed pressures, losing ground rapidly in line with finished long products entering a sharp downtrend. Billet trade prices have slumped INR 1,300/mt ($14/mt) to INR 45,000/mt ($482/mt) ex-Mumbai and are down INR 500/mt ($5/mt) to INR 41,750/mt ($447/mt) ex-Raipur in the central region.
$1 = INR 93.43
