Buoyed by the rise in the local commercial sale price and the anticipation of a demand revival in China after the holiday, Indian integrated steel mills are going to push up billet export prices, SteelOrbis has learned from trade and industry sources on Wednesday, February 17.
The sources said that, with the revival in scrap prices and the rebound in long products in key markets, Indian billet exporters are attempting to be ahead of the curve before the resumption of business activity to push up ex-India billet prices. However, the latest tenders are reported to have been closed at still low price levels.
The expected increase in export prices is also seen as an attempt by exporters to protect their realizations in terms of the local currency against the background of the steadily appreciation of the Indian rupee against the dollar, moving up to levels of INR 72.70 to the US dollar with further appreciation forecast, supported by the strong inflow of dollars into the country.
Market sources said that local Indian billet prices have bounced back from a recent slump by INR 1,000-1,200/mt ($14-17/mt) to INR 34,700-35,200/mt ($477-484/mt) ex-works.
The target billet prices of Indian mills are $520-530/mt FOB compared to trades concluded in the range of $510-520/mt FOB a week ago. But the latest tenders held this week were still closed at low levels.
Anticipating a revival in buying interest from China, where long steel products are forecast to gain ground, two Indian government-run steel mills floated two exporter tenders on Monday, February 15, open for 15 days for receipt of bids. According to market sources, a tender for 30,000 mt of 150 mm billet was closed at $511/mt FOB with 100 percent advanced payment. Another auction is rumoured to have been closed at a similar level today. “They were expecting $530/mt FOB levels, but closed at $511/mt FOB. It is a low price. But everyone is thinking that from tomorrow to Monday the market will jump $20-30/mt,” a trader said.
According to market sources, an eastern India-based integrated steel mill has concluded a trade for around 20,000 mt to a trading firm at the already higher price level of $520-525/mt FOB. But most market sources expect China to come back on February 18 to see a clearer market picture. For now, the reference price for ex-India billet remains at last week’s levels of $510-520/mt FOB.
“The revival in the long products market is a positive reversal of the outlook for exports of semis. Local prices of semis too are looking up amid higher merchant bookings from secondary rebar producers anticipating that local rebar prices have very limited downside risks from current levels despite opposition from a section of users,” an official at an eastern India-based integrated steel mill said.
“Indian mills have almost exhausted export allocations for the current fiscal year. Export prices will also depend on fixing export allocations for the first quarter of next fiscal year, now that some mills have started accepting April shipment contracts,” he added.
$1 = INR 72.70