Indian billet export prices have been under strong pressure since last week due to almost zero demand from Southeast Asia, while bids from China, which was the main sales destination recently, fell very rapidly, resulting in few sales of ex-India billet, which were at lower prices, SteelOrbis learned from trade and industry circles.
Ex-India billet price levels have fallen to $600-610/mt FOB, versus $610-625/mt FOB, but if last week the latest deals were done at the higher end of the range ($625/mt FOB), at the moment sellers have trouble getting even $600/mt FOB, according to market sources polled by SteelOrbis.
Offer prices have been maintained in the range of $610-620/mt FOB, and only one small deal was done at $600-610/mt FOB to China. According to the sources, the week started with China’s valuation ceiling of $680-690/mt on CFR basis, while not many Indian mills were willing to push sales at such tradable price levels. By the middle of this week, buyers’ price ideas fell even lower, so to get bids at $670/mt CFR was difficult.
State-run Rashtriya Ispat Nigam Limited (RINL) has emerged as the most aggressive exporters in terms of offers, having floated several billet and bloom export tenders over the past week aggregating 60,000 mt, for October deliveries. Sources said that the market has been closely watching the outcome, with bids scheduled to close over the next seven days. “The RINL tender for 150 mm billet which opened yesterday [on August 18] didn't get much interest,” a trader said.
Another state-owned producer SAIL, which was expected to close an auction for 19,000 mt of 125 mm billet on Monday this week, was forced to postpone it due to low bids. One source claimed that the tender deadline has been extended until August 24. “The market in the Philippines [where usually 125 mm billet sold] is super quiet,” a source said.
“The mood in the export market is difficult. Deals are possible, but exporters are not able to push up prices. Even limited deals with China are facing hurdles of vessel delays owing to quarantine requirements in China. Chinese buyers are not accepting long delivery timelines,” an official at a government-run steel mill said.
“Freight rates from India to China are also around $80/mt, against $70-80/mt a week ago. Buyers are seeking billet prices to be lowered to negate the impact of this rise in the freight cost on the landed price. It is difficult for most Indian exporters to meet such demand to conclude deals,” he added.
Sources said that, while private steel mills are generally deferring concluding deals, one eastern India mill made a modest volume trade of 15,000 mt to a China-based buyer at around $600-610/mt FOB for October shipment late last week or early this week. This price corresponds to $680-690/mt CFR China.
