Indian billet exports have been strongly supported by rising prices and the positive outlook for demand in China. As a result, despite a rise in freight costs, the latest tender for 150 mm billet from India has been closed at a much higher price level.
State-owned producer RINL has closed a tender for another 30,000 mt of 150 mm billet at $622/mt FOB in the second half of this week, which is $31/mt above the company’s two previous tenders, both finalized at $591/mt FOB late last week and early this week.
Severe production cuts in China have supported prices strongly this week, and the tradable level has increased from $690/mt CFR last Friday to $720/mt CFR or even above today.
Though freight from India to China has increased recently from $80/mt on average to $90-100/mt, demand is still seen as traders expect prices on CFR basis to keep moving up. The $622/mt FOB level translates to $722/mt CFR if the freight is $100/mt, including charges for waiting in quarantine at ports, the source said, and, though this level is relatively high for now, next week prices will be higher. A Chinese trader said that an Indonesian producer has started to offer billet at $730/mt CFR to China today and may conclude a deal at $725/mt CFR. The deals for ex-ASEAN billet were closed at $710-720/mt CFR yesterday.
On September 10, local billet prices in Tangshan have added RMB 30/mt ($5/mt) to RMB 5,200/mt ($805/mt) ex-works, translating to $713/mt, excluding 13 percent VAT.
$1 = RMB 6.4566