Indian mills have managed to increase billet export prices in deals, even despite the continued absence of Chinese importers from the market and the uncertain further trend in Asia, sources told SteelOrbis on Wednesday, January 13.
Ex-India billet prices are at $575-580/mt FOB lately, up by $5/mt from last week. A tender from a state-owned mill for 30,000 mt of 150 mm billet announced last week has finally been closed at $575-577/mt FOB, with a trader making the highest bid, planning to sell the material to Sri Lanka, SteelOrbis has learned.
According to market sources, offers have increased to $590-595/mt FOB compared to $580-590/mt FOB a week ago, but most Asian buyers seem to have set a valuation ceiling of $600/mt on CFR basis to seriously consider offers and conclude trades.
“Prices are still strong as buyers have limited options of sourcing, with most producers having a low exportable surplus and the risks of a downside correction in prices of semis are low considering that finished steel prices are performing strong in most markets,” an official at an India seller said. “Chinese local billet prices are depressed and a lot of Asian and Gulf buyers are expecting this to spread across other markets. Our assessment is that this is a blip and will not spread to finished products and the supply side of billet will remain tight and support prices as indicated by the fact that buyers are cautious but still absorbing conservative price increases. Indian steel mills will keep export allocations low and conclude trades overseas only at the right price supported by the strong performance of semis in the local market,” he added.
The tradable level, according to sources, should be at $580/mt FOB India and some bids have been heard at this level, thought deals have not been confirmed by the time of publication.
In the local market, integrated steel mills have continued to sharply reduce merchant sale of billets to maximize their own captive conversion to rebar in view of the shortage of construction grade rebar in the market, pushing up local billet prices. Sources at mills said that the billet trade price was up INR 750/mt ($10/mt) to INR 38,750-39,250/mt ($529-535/mt) ex-stockyard.
$1 = INR 73.40