Ex-India billet prices have dropped in the face of aggressive competition from China, but large local mills have not been inclined to push through deals, preferring to wait for the latest downtrend to settle, SteelOrbis learned from trade and industry circles on Wednesday, November 13. A revival in local billet prices has also eased the pressure on local mills to sell overseas at discounts and has encouraged them instead to focus on domestic sales with better margins.
While government-run mills, the more active exporters of semis, have been out of the export market, a few large private sector mills have dropped offer prices by around $10-20/mt to the range of $460-480/mt FOB. However, buyers in the Asian region have preferred cheaper ex-China alternatives, which have been offered aggressively, so Indian mills taking their cue did not push for export deals.
In fact, according to market chatter, one eastern India-based based integrated mill is reported to have submitted an offer for 30,000 mt to an Asian buyer at $460/mt FOB, but negotiations were called off after bids were even lower at $445-450/mt FOB levels, the sources said.
The reference price for ex-India billet has been lowered by $5-10/mt over the past week to $455-465/mt FOB, considering the latest offers on average and the possible tradable level.
“The disappointment over the economic stimulus in China is weighing heavily on the export market, particularly the in Asian region. With no improvement in demand in China, more volumes are flowing out from the country. The depreciation of the yuan is also forcing prices to seek lower levels. Indian mills are facing very challenging competition, and they prefer to remain on the sidelines as far as selling overseas is concerned,” an Indian source said.
“We are not venturing to second-guess a new bottom. It is too early in the new downtrend. We will continue to focus on selling semis locally and increase our captive conversion of semis to finished steel,” a mill said.
Meanwhile, a rebound in the prices of semis in the local market has also eased the pressure on mills to sell overseas at discounts. The billet merchant trade price is up by INR 1,300/mt ($15/mt) to INR 42,800/mt ($507/mt) ex-Mumbai and has gained INR 550/mt ($7/mt) to INR 39,950/mt ($473/mt) ex-Raipur in the central region.
$1 = INR 84.40