Ex-India billet prices have continued to move up further as integrated steel mills ignored more unconfirmed reports of trade cancellations. Export allocation has remained limited, with minimal risks to mills’ price increases, amid strong local demand, SteelOrbis learned on Wednesday.
Market sources said that there were a few more unconfirmed reports of at least a few Asian buyers cancelling contracts concluded earlier by private steel mills, close on the heels of similar reports of buyers reneging after submitting the highest bids in tenders floated by government-run steel mills, while overall export trading activity has fallen slightly owing to year-end considerations and buyers preferring to await new pricing signals from producers.
Ex-India billet prices have reached $560-570/mt FOB, against $540-545/mt FOB in the earlier week.
“Local steel mills have very little downside risks to pushing up export prices of semis even if contract cancellations are increasing, as export allocations are low and finished steel supplies in the local market is in shortage,” an official at Jindal Steel and Power Limited said. “We hear of billet FOB offers touching $600/mt in some Asian markets, though we have not heard of any buyers at such levels. But it is an indication of the significant headroom for prices to move up further, which will remain a positive support for Indian steel mills,” he added.
Sources said that an Odisha-based steel mill has reported a trade for 12,000 mt at around $560-565/mt FOB, while it concluded a supply contract with a West Asian buyer for 10,000 mt at a price of around $565-570/mt FOB for end-of-March delivery. Also, a small contract from a mill for around 15,000 mt was signed at a price of around $570/mt FOB. This level translates to $595/mt CFR for the Southeast Asian market.
Meanwhile, merchant local billet sale prices have continued to gain ground amid strong buying sentiments from secondary mills, following the surge in rebar prices and integrated steel mills limiting such merchant sales owing to higher capacity utilizations of their own captive conversion plants. Officials at integrated steel mills said that billet sales prices have gained another INR 500/mt ($7/mt) to INR 37,500-38,000/mt ($511-518/mt) ex-stockyard.
$1 = INR 73.40