Indian billet producers have managed to increase their local prices and sell some volumes in the export market as the uptrend of prices has prevailed in both local and external markets.
Ex-India export deals have been done at $400-410/mt FOB for end January-early February delivery. At the same time, offers for 150 mm billet have moved mostly to $410/mt FOB, against $400-405/mt FOB a week earlier.
Citing reports in the market, sources said that Steel Authority of India Limited (SAIL) was able to conclude an export contract for 150 mm billet through tendering with the highest bid at $406.50/mt FOB.
Also, another eastern India-based steel mill has completed an export tender for 100 mm billets totaling 50,000 mt for early February delivery at $400.5/mt FOB as the highest bid, the sources added.
Local Indian billet (grade IS283 – 100 mm x 100 mm) prices have also rebounded during the past week, moving significantly higher in reaction to the revival in the rebar market in India and as domestic steel mills re-allocate higher billet volumes for captive conversion, leading to the prospects of lower commercial sales of billets. Billet prices have gained around INR 1000/mt ($14/mt) to INR 28,450/mt ($401/mt) ex-works.
“If higher rebar demand and prices seen earlier in the week are sustained, margins for captive conversion of billets to rebar will turn positive. Large integrated steel mills have already been re-working their marketing strategies. The market expects non-integrated rebar producers to pay more for merchant billets in the coming weeks, giving integrated steel mills an edge in pricing power,” a manager at Rashtriya Ispat Nigam Limited said.
$1 = INR 70.90