Ex-India billet prices have declined further in the face of stiffer competition in the global market and also given falling local merchant sales volumes against the backdrop of the distressed rebar market, SteelOrbis learned from trade and industry circles on Wednesday, July 17.
Sources said that more large mills have become active in submitting offers, which have been at $475-480/mt FOB officially, going down by $10/mt over the past week. However, the tradable prices, based on buyers’ price ideas, have fallen even further - to $450-460/mt FOB, from $470/mt FOB last week, amid the increased weakness caused by the higher volumes of ex-China offers and sales.
The Indian billet reference price has slipped to $460-480/mt FOB, down by $10/mt.
According to the sources, government mills have been the most active in submitting offers and some IF mills have also increased export exposure as local re-rollers have reduced purchases of semis after cutting back production of long products.
A government mill floated a fresh export tender for a relatively smaller volume than usual of 20,000 mt, with bids being heard at the very low level of $450/mt FOB.
There was information that a spot sale of 20,000 mt was done at $455/mt FOB for delivery to the Middle East, but this could not be confirmed by the time of publication. Also, an Odisha-based integrated mill was in negotiations with a Hong Kong-based trading firm for onward sale at around $460/mt FOB, the sources said.
“Large integrated mills are caught in a double bind. They are facing inventory build-ups of long products amidst a slowdown forcing a reduction in output and thereby lower captive consumption of semis. At the same time, they are faced with low offtake of semis from secondary mills. Pushing volumes overseas by dropping prices is a compulsion now,” an official at an Odisha-based mill said.
Meanwhile, sources pointed out that, while merchant trade billet prices have remained unchanged over the past week, this did not reflect stability as trade volumes have been negligible. Billet trade prices are unchanged at INR 41,500/mt ($496/mt) ex-Mumbai and are also unchanged at INR 39,300/mt ($470/mt) ex-Raipur in the central region.
$1 = INR 83.60
