Ex-India billet export prices have continued to increase during the past week with higher prices finding acceptance in the market. But the export allocation of local integrated steel mills has remained low, which is unlikely to change in the near future, while buyers are expecting the uptrend to plateau, taking cues from the price uncertainties in China, SteelOrbis has learned on Wednesday, December 2.
Indian integrated steel mills have increased billet export prices to $475-485/mt FOB, up from the assessment of $475-480/mt FOB last week.
Sources said that billet prices have continued to surge across the Southeast Asian market despite Chinese steel prices entering uncertain territory. Asian buyers, who have needed to restock, have had to purchase at price levels of around $500-515/mt CFR. But even given the current increase in bids, Indian producers have been reluctant to increase the volumes on offer amid strong local billet prices in India, which kept market activity at low levels.
However, an Indian state-run steel mill has closed a tender for 30,000 mt of billet with an Asian trading firm at $476/mt FOB, but there are reports that the final price was a level a bit lower than that. Some sources expect the material will be sold in Southeast Asia, but some said that the targeted destination could be Sri Lanka or the Middle East.
Also, there has been information in the market about trades at $480-485/mt FOB from India to Asia, but this could not be confirmed by the time of publication. Freight to Southeast Asia has been assessed by market sources at around $25/mt.
Meanwhile, the local merchant sales price of billet in India has increased by INR 500/mt ($7/mt) to INR 35,700-36,000/mt ($483-487/mt) ex-stockyard amid rising demand, sources said.
“Indian integrated steel mills have virtually negligible export allocations for January-February. The export price outlook is not positive. It is only a matter of time that the prices we see currently in Asian markets get aligned to falling demand in China. Hence, Indian producers are in no rush to increase export allocations at a time when local prices are increasing at a faster pace than export realizations,” an official at Jindal Steel and Power Limited said.
$1 = INR 73.90