Ex-India billet prices have continued to suffer setbacks as extreme bearish sentiments have deepened across Asian destinations, while business activity has remained muted in the Gulf. Sellers have still been unable to push deals with bids continuing to fall, SteelOrbis learned from trade and industry circles on Wednesday, April 5.
Ex-India billet prices have declined to $540-560/mt FOB, compared to $550-580/mt FOB as the reference level last week. The lower end of the range corresponds to the average bids, while the higher end represents what mills can agree on. And some in trade circles claimed that some low-volume tonnages have been under negotiations at a price as low as $530/mt FOB, but sellers were not willing to confirm such a “deep discounted deal” to avoid giving signals of any “panic selling in response to inventory pressures,” a source told SteelOrbis.
“Bids were at $550/mt FOB last week, while mills were pushing for $580/mt FOB, so the mills postponed sales. For new tenders, I am not sure that last week’s $550/mt FOB is achievable,” a trader said.
Sources said that buyers were not following up offers or withdrawing bids submitted late last month, anticipating the “bearish contagion triggered by deep price cuts by mills in China” will spread and hence have not been accepting limited price cuts by local sellers.
The sharp fall in trading despite price cuts has also been aggravated by low business activity in the Gulf, where trade circles have not been willing to conclude deals during Ramadan, the sources said.
At least one government mill, which had put up 30,000 mt of billet and 20,000 mt wire rod offer for spot export sales over the past week, is reported to have withdrawn both offers after bids were below expectation.
“Most mills have abandoned floated export tenders as even $540-560/mt FOB spot sales are not achievable. There are too many cheaper sourcing alternatives that have emerged in the Asian region, while the Gulf remains inactive,” sources at a government-run mill said.
“Declines in the finished steel market have percolated down to semis. We do not see any improvement in overseas markets at least until after mid-April. Some export allocations will have to be diverted for local sales by mills in the current quarter,” the sources said.
The sliver of optimism was supported by a strong rebound in local billet merchant sale prices. Prices of billet from integrated mills have rebounded by INR 1,800 ($22/mt) to INR 48,300/mt ($587/mt) ex-Mumbai and are up INR 1,150/mt ($14/mt) to INR 46,350/mt ($563/mt) ex-Raipur in the central regional market.
$1 = INR 82.30