Sentiments in India’s billet export market have improved slightly, with revived buying interest from a key market like China, but exporters have failed to push up realizations visibly as buyers are still very price-sensitive, SteelOrbis has learned from trade and industry circles.
Ex-India billet export prices are heard in the range of $600-610/mt FOB, almost the same as in the previous week, but bids have improved this week and the market has witnessed the return of higher buying interest, while Indian sellers have also been willing to conclude export deals with local billet prices on a downtrend.
Unlike a week ago, when buyers were seeking offers at $580-590/mt FOB and below and sellers were turning away, the revived sentiments in China have been attracting interest at $600-610/mt FOB.
“The positive is that there are more buyers in the market now. The local billet prices are softening rapidly and exporters are having to accept deals at $600-610/mt FOB levels to avoid inventory build-ups,” an official from a government-run long steel producer said.
“Long steel prices are recovering in China. This is leading to a revival in imported semis. But with a larger number of offers from the CIS and ASEAN region, it is to be seen how aggressive Indian exporters’ pricing can get to push volumes overseas. A lot will depend on the bottom of local billet prices,” he added.
Sources said that a southern India-based government-run steel mill has concluded an export tender for 20,000 mt with a China-based trading firm with the highest bid received at around $610/mt FOB.
An eastern India-based integrated steel mill has reported a trade for China at $600-605/mt FOB, though the tonnage could not be confirmed. The freight is estimated at $70-80/mt at the moment, so this price corresponds to $675-680/mt CFR, without considering the trader’s margin.
Meanwhile, local billet prices fell sharply over the past week in reaction to the stress faced by secondary steel mills, low capacity utilizations and low merchant sales of billet from integrated steel mills. Sources said that local billet prices are down by INR 2,000/mt ($27/mt) on average. Local prices are quoted at around INR 40,600/mt ($556/mt) ex-works in the central and western regional markets, although slightly higher prices have been reported by integrated mills in West Bengal in the east at around INR 41,500/mt ($568/mt) ex-works.
$1 = INR 73.00