Ex-India billet prices have been kept stable over the past week, with prices in key destinations showing signs of bottoming out, and sellers not pushing sales after local demand and prices of semis staged a sharp rebound amid tight supplies, SteelOrbis learned from trade and industry circles on Wednesday, January 21.
Sources said that, while ex-India billet offers have been stable at $445-450/mt FOB, large mills have not been following up offers already submitted as sales volumes and prices have surged in the local market with large integrated mills increasing captive conversion to construction grade long products and sharply reducing merchant sales of semis.
According to the sources, the bullish market conditions for long products have prompted large mills to increase production and, with higher captive conversion of billets, sales of billet are down significantly, pushing up trade-level prices of semis.
For example, the local market for semis has staged a sharp reversal of the recent short-lived correction and billet trade-level prices have surged by INR 1,500/mt ($16/mt) to INR 44,000/mt ($483/mt) ex-Mumbai and have gained a robust INR 1,600/mt ($18/mt) to INR 40,900/mt ($449/mt) ex-Raipur in the central region.
“The outlook on the export front is optimistic but does not offer immediate gains in terms of sales margins. The domestic market is extremely bullish now and, in comparison, exports are not a viable option. Sellers are not waiting for improvements in ex-India billet prices when local prices have bounced back and supplies are very tight in tandem with the local rebar market,” an official at Jindal Steel Limited said.
“The fact is that most large mills including us have very little to offer for export at a time when the local market is offering so much more and better. Exports will have to wait till there are improvements both in terms of buying interest and what it offers to us. We will wait and watch the export front while focusing on maximizing immediate gains locally,” he added.
