The recent silence in the ex-India billet export trade was broken by the results of an export tender by a government-run mill, with the highest bid being at a higher level than expected, but this has failed to improve the overall sentiment and expectations, prompting private mills to refrain from increasing export allocations, SteelOrbis learned from trade and industry circles on Wednesday, September 12.
A government-run mill, which held an export tender on September 12, received a highest bid of $513/mt FOB, though there has been no information on whether the mill accepted it and what could be the probable destination of the material.
According to the sources, while the bid was on the higher side of expectations, it failed to buoy sentiments and overall trade conditions and, even though there was some interest from traders to purchase for positions, end-users’ bids in Southeast Asia have remained low.
Most bids have averaged at around $500/mt FOB from buyers, but this was considered low by private mills, which are already increasing billet volumes for captive conversion to construction grade long products, verging on a shortage situation in some of the regional markets and fetching “healthy margins”.
“The tender by a government mill is a positive. But this is unlikely to impact overall exports as key destination markets are still in oversupply and, though ex-China prices have started to improve, it is not enough to force buyers to look at other sources,” an official at a private mill said.
“The local rebar market continues to get stronger and merchant trade in billet is also strong as a result. Hence, exporters can well afford a further consolidation of international prices before floating new offers,” he said.
Meanwhile, in the local market, billet trade prices are down INR 1,000/mt to INR 46,000/mt ($554/mt) ex-Mumbai and are down INR ,1250/mt ($15/mt) to INR 43,850/mt $528/mt) ex-Raipur in the central region, but trade circles have said that the losses are an expected correction after the rapid rise seen in earlier weeks and the slight improvement in supplies in the market from integrated mills coming back into production after a routine maintenance shutdown last month.
$1 = INR 83.00
