Despite weak demand for billets in Asia over the past week owing to year-end considerations and slight negative sentiments earlier, ex-India billet export prices have continued to edge up amid limited allocations from integrated steel mills and the positive outlook among Asian buyers prompted by signs of a finished steel price revival in China, traders and officials at producing mills said on Wednesday, January 6.
Ex-India billet price levels have settled at $575-580/mt FOB this week, up by $10-15/mt since last week. This level was confirmed in the latest tender. Offer prices from integrated steel mills have been heard at $580-590/mt FOB.
Most billet export offers over the past week were accounted for by steel mills in the eastern region as western India-based steel mills had no export surplus in view of the shortage of rebar in the local market and most incremental billet production was being allocated for captive conversion of rebar by integrated mills.
“Export of semis does not make much economic value to us as local realizations from finished steel sales are very strong. We are continuously assessing key markets and can consider increasing billet export allocations if bids touch projected targets of $600/mt on FOB basis, which is possible as volumes available below that are getting tighter,” an official at Jindal Steel and Power Limited said. “The slight pessimism over Chinese steel prices is also fading. Demand for semis in Asian markets is also bouncing back,” he added.
A state-owned steel producer has reportedly sold a cargo of 30,000 mt of 150 mm billet in a tender at around $575/mt FOB or slightly above, according to some market sources. There are still discussions in the market whether this tender was closed on Monday or on Wednesday, but its final price was confirmed by a number of sources, who said that it is the current market level at the moment. There was information that Monday’s tender was cancelled after the highest bid hit only $562/mt FOB, and so the producer decided to open another auction and the material was finally sold at a higher level - $575/mt FOB or slightly above.
Another smaller-tonnage deal for 15,000 mt was rumoured at $580/mt FOB, market participants said.
According to market sources, with integrated steel mills further reducing billet merchant sale volumes to secondary mills, prices have continued to seek higher levels, gaining INR 500/mt ($7/mt) to INR 38,000-38,500/mt ($520-527/mt) ex-stockyard and this level is still mainly indicative. Small tonnage bookings are reported at a higher level - at INR 40,000-40,500/mt ($546-553/mt) ex-stockyard.
$1 = INR 73.20