Ex-India billet trade has continued to remain inactive amid the further widening of the bid-offer gap and robust merchant demand in the local market as secondary mills attempt to raise outputs amid an emerging market shortage of rebars, SteelOrbis learned from trade and industry circles on Wednesday, August 30.
While ex-India billet offer prices have been maintained at $505-520/mt FOB, amid the deepening pessimism in Southeast Asian and Gulf regions buyers in the Asian market were heard to be submitting bids at the same valuation but on CFR basis, unworkable for local sellers.
Sources said that both government and private mills in India are out of the export markets for semis following one of the strongest rebounds in construction grade finished steel and rapid domestic merchant billet trade at a time when integrated mills have been increasing their own captive conversion of billets to rebar and reducing billet sales in the open market. The SteelOrbis reference price has been corrected up slightly by $5/mt over the past week to $505-515/mt FOB amid the unwillingness of exporters to sell cheaply abroad.
“There is very little business prudence in pushing sales overseas at low prices when local prices are looking good and improving. Sellers do not have many volumes of semis available and hence are under no pressure to consider low bids,” a source at an Indian mill said.
“Nominal volume deals are being concluded by some large mills, largely to maintain market presence but at negative margin realizations which are put under marketing costs,” a source said.
Meanwhile, with the slowdown in arrivals from integrated mills for merchant sales, local billet prices have recorded major gains for the second consecutive week. Trade billet prices have surged by INR 2,400/mt ($29/mt) to INR 47,000/mt ($569/mt) ex-Mumbai and have gained INR 2,300/mt ($28/mt) to INR 45,100/mt ($546/mt) ex-Raipur in the central region.
$1 = INR 82.60
