Ex-India billet prices have gone down again over the past week amid nervous sentiments in Asia and low business activity in the Gulf, while sellers also did not push aggressively to conclude deals preferring to wait for a turnaround in the bearish market conditions, SteelOrbis has learned from trade and industry circles.
Some private mills have adjusted ex-India prices to $530-550/mt FOB, against $540-560/mt FOB, but negotiations have been limited with most bids from Asian buyers sought valuations in the range of $540-560/mt on CFR basis.
Market sources said that, while private mills have preferred to move to the sidelines, no new export offers were floated by government mills and most sellers awaited the details of the outcome of an export tender for 20,000 mt of billet and 10,000 mt of wire rod, bids for which were scheduled to close later, today, April 12.
According to the sources, considering that these offers were ‘re-tenders’ after they failed to attract any buyers earlier, if deals were closed successfully the second time, bid levels would set the short-term trend.
“The elephant in the room continues to be the weak prices in China. At the same time, sellers have little leverage as pricing has lost some weightage in negotiated deals because real demand across Asia and the Gulf is weak too,” an official at a large private steel mill said.
“Local mills will need to hold their nerve and not panic into cutting prices too sharply going forward. From the sellers’ point of view, a deep bottom is not desirable because a recovery will be prolonged even with a demand revival. Prudence requires a new mix of local versus export sales,” he said.
Meanwhile, the local billet market has staged a reversal with prices losing INR 500/mt ($6/mt) to INR 47,800/mt ($583/mt) ex-Mumbai and down INR 1,000/mt ($12/mt) to INR 45,350/mt ($553/mt) ex-Raipur in the central regional market.
$1 = INR 82.00
