Weak import market in China and still available cheaper traders’ position cargoes were rising fears among Indian billet exporters, curtailing trades, and reports in the market were indicating bids in export tenders by some mills were falling well below the $600/mt FOB mark for the first time in several months, SteelOrbis learned from trade and industry circles on Wednesday, November 17.
While interest in imports was expected to weaken further in face of falling billet and long product prices in China and even acceptable price for small stray volumes slumping to levels of below $600/mt CFR, Indian private steel mills had mostly pulled out of overseas semis trading.
It was pointed out that only two Indian state-run mills were in the market with export offers against tenders during the past week. Sources said that the most bids in these tenders were well below the $600/mt FOB mark, against sellers’ target price of $600-620/mt FOB.
According to a source in a government run steel mill, the highest bid in 30,000 mt of 150 mm billet tender was received at $550-560/mt FOB, one of the lowest level at least in the current year. Some sources reported that this tender was closed at $590/mt FOB, but this information was denied by a number of sources. “I couldn’t understand who can pay this,” one Asian source said. “RINL 150 mm [tender] most likely won't be awarded,” another trader said. He also added that the company’s 90 mm billet auction got the bid at $550/mt FOB, too low for the seller.
Another Indian producer SAIL has also failed to close its tender opened last week.
“We don’t think price of semis will recover in the short term. Chinese steel mills are continuously cutting local billet price and appetite for imports is very low in view of soft long product prices in that country,” sources in government run steel company Rashtriya Ispat Nigam Limited (RINL) said.
“Billet prices is weakening in the local market too. But overall inventory situation is not so bad for prompt billet sellers to drastically cut export prices to levels of achievable price in China,” the sources said.
As a result, the SteelOrbis reference price for ex-India billet has declined to $560-590/mt FOB, far below $600-605/mt FOB seen last week. The lower end of the range corresponds to the most bids, while the higher end represents the level Indian mills are seeing reasonable.
According to trade circles, local billet prices fell over the past week but with wide variations across regional markets. The biggest losses were reported from Raipur in central region where prices were down INR 4,000/mt ($54/mt) to INR 42,000/mt ($564/mt). In Mumbai price edged lower by INR 1,000/mt ($13/mt) to INR 45,000-46,000/mt ($604-618/mt) ex-warehouse.
