Prices for Indian billet in the export market have continued to increase over the past week even though the market mood has worsened slightly with weak demand, while the number of offers have been critically limited, SteelOrbis has learned.
Traders and sources said that there have been speculative reports available in the market that Asian buyers pulled out of two billet export tenders of state-run integrated steel mills after submitting the highest bids, leading to cancellations of the tenders.
The indicative price level for Indian billet is $540-545/mt FOB, up from $520-530/mt FOB in the earlier week.
“Every segment of the market - raw materials, semis, finished steel - are ruling at two-to-three year highs, particularly in a key market like China. Chinese rebar prices are at a three-year high. Doubts are surfacing whether this trend is sustainable. This has pushed large segments of processors and end-users to the sidelines,” an official from Jindal Steel and Power Limited (JSPL) said. “The Indian domestic market remains strong and demand is less speculative, which will continue to support local steel producers, insulated from any downside risks in the export market,” he added.
According to reports, neither of the two state-owned steel mills have announced any revised date for floatation of new tenders, a tentative signal that buyers are much more cautious than earlier.
Market sources said that a Maharashtra-based steel mill concluded a trade to Asia at $540-545/mt FOB, while the same mill also concluded a smaller-volume trade with a Gulf-based buyer at a price of around $540/mt FOB.
Meanwhile, billet merchant sale prices in the local market continued to show gains amid limited volumes on offer from integrated steel mills and secondary rebar producers facing shortages of semis for conversion. Billet prices moved up another INR 500/mt ($7/mt) to INR 37,000-37,500/mt ($501-507/mt) ex-works, sources in secondary mills said, while some small mills were pricing billet at INR 38,000-38,500/mt ($514-521/mt) ex-works.
$1 = INR 73.90