Ex-India billet prices were pushed up nominally over the past week as most large mills are still not submitting export offers, instead preferring to push higher volumes for either captive consumption or merchant billet sales amid the unabated rise in local prices, SteelOrbis learned from trade and industry circles on Wednesday, January 7.
Sources said that a few large mills are heard to have submitted ex-India billet offers in the range of $445-450/mt FOB, compared to $435-440/mt FOB a week ago, but were not followed up with talks, leading to near silent trade conditions.
According to the sources, with the past few weeks seeing a rapid rise in prices of finished long steel products, most large mills have been rapidly increasing captive consumption of semis in their rolling mills, leading to a reduction in the volumes of semis moved to the market for merchant sales.
The rally in finished steel prices, coupled with lower merchant sales of semis, has provided fresh support for billet trade prices to consolidate sharply at higher levels. Billet trade prices have surged INR 1,000/mt ($11/mt) to INR 43,000/mt ($477/mt) ex-Mumbai and are also up INR 1,000/mt ($11/mt) to INR 40,000/mt ($444/mt) ex-Raipur in the central region.
With such gains seen in the local market, large mills have not been pushing overseas sales and have preferred to hold back volumes until key export destinations are ready to accept significantly higher prices, the sources said.
“The local market is offering far, far better margins that exports can in the current conditions in overseas destinations. Most mills are not even submitting offers as they do not have exportable volumes of semis,” an official at Jindal Steel Limited said.