Ex-Indian billet export prices have continued to surge with integrated steel producers submitting critically low-volume offers at high prices, seeing a strong global trend. At the same time, buyers in Asia have turned cautious with landed valuations inching close to the $500/mt CFR mark and uncertainties over whether higher prices will be able to be sustained in view of the emergence of a price correction in China, SteelOrbis has learned on Wednesday, November 25.
Ex-India billet export prices have reached $475-480/mt FOB compared to the levels of $455-465/mt FOB in the earlier week. But with the local billet market consolidating at stronger levels in a bullish phase, producers have not been focusing much on exports and lower bids have been rejected by a number of producers.
At least two market sources said that one western India steel mill with virtually no export allocation for January-February has been submitting offers in the range of $490-500/mt FOB and clearly indicating that it is not interested in concluding trades overseas.
Industry sources and traders have said that, while prices are continuously seeking higher levels in several key Southeast Asian markets, buyers have been taking their cue from emerging signs of a price correction in China.
Sources have said that local billet prices in India have entered a strong bull run with the price of merchant sales from local small IF producers quoted at around INR 35,200-35,500/mt ($475-480/mt) ex-stock, compared to the tradable price range of INR 32,500-33,000/mt ($439-446/mt) ex-works, in a market situation with producers severely limiting volume offerings to secondary rolling mills and rising demand for their own captive consumption to increase production of flat products.
According to the sources, while Chinese buyers are largely absent from concluding deals for ex-India billets, a western India-based integrated steel mill has reported a trade for 35,000 mt at around $475/mt FOB to Asia, which, however, has remained unconfirmed so far. Also, there has been a rumour about a sale by a trader at $480/mt FOB, but this price was assessed by most sources at too high and not reflecting the current market.
“For most of the local billet producers, it is a sellers’ market, with sellers having significant pricing power backed by short supplies and strong market realizations from local merchant sales,” an official with Jindal Steel and Power Limited (JSPL) said.
“Government steel mills are clearly out of the export market following government advice to focus on mitigating the shortage of semis and finished steel in the local market. Export is a peripheral focus only if bids are at highest levels for private steel mills,” an official at Steel Authority of India Limited (SAIL) said.
$1 = INR 74.00