Indian billet export activity has remained quiet with sparse buying activity and some export tenders of government-run mills fetching lower-than-expected bids. A moderate improvement in outlook has been seen among sellers since semis are exempted from the levy of the newly imposed export tax, but again the bearish international market and falling local prices have added pressure on ex-India billet prices, SteelOrbis learned from trade and industry circles on Wednesday, May 25.
Ex-India BOF billet prices have indicatively fallen to $620-630/mt FOB, down from $650-670/mt FOB last week, even though there has been a lack of lower firm offers. Reports indicate that an export tender for 15,000 mt of 90mm billet from a government mill held over the past week received a highest bid of around $630/mt FOB, sources said, but the tradable level for the benchmark 150 mm billet would be closer to $600/mt FOB in the current conditions.
Also, ex-India IF billet from one mill has been offered at $650/mt CFR to the Philippines this week, which translates to $595-600/mt FOB or so.
The sources said that buyers in China are largely absent from the market, and even ex-Russia offers at significantly lower prices were finding it difficult to attract buyers, indicating deep bearish sentiments in most key markets.
In Southeast Asia, the Indonesian major BOF supplier Dexin Steel has cut offers to $625/mt FOB for 150 mm 3SP billet, translating to around $655/mt CFR SE Asia. So, with the current freight rates, this price translates to $600-605/mt FOB from India, sources have said. “China’s futures continue to drop, plus India’s export duty [on finished steel], so if I were a buyer today, I honestly wouldn't consider $630-635/mt CFR Manila as an underbid,” a trader said.
“There is some optimism over the immediate outlook among some producers as semis exports have been kept out of the purview of the 15 percent export tax imposed by the government. But will it lead to improved overseas sales of semis by Indian mills? Most probably not,” an official at a government-run mill said.
“It is to be noted that private mills have been out of exports of semis for several months now. Higher export allocation of semis by these mills now when most key markets are bearish can be expected to put additional pressures on ex-India offers,” he said.
Meanwhile, in the local market, pressures have mounted on local billet trade prices in reaction to lower overseas sales and the low off-take by secondary mills, following the collapse of rebar prices triggering a rise in billet inventories at integrated mills.
Trade circles said that billet prices are down to INR 48,800/mt ($630/mt) ex- Mumbai, down INR 3,700/mt ($48/m), and at INR 46,400/mt ($599/mt) ex-Raipur in the central regional market, losing INR 4,500/mt ($58/mt). Trade prices are reported at INR 51,000/mt ($658/mt) ex-Chennai in the south, down INR 3,000/mt ($39/mt), sources said
$1 = INR 77.50
