Indian integrated steel mills have succeeded in pushing up billet export prices and breaching the $400/mt FOB level during the past week, with October shipment bookings commenced. But buyers are reported to be cautious towards the higher price levels.
According to market sources, ex-India billet prices have surged to $400-405/mt FOB in deals to China, but the buying mood is cautious particularly among Chinese buyers, with Indian steel mills claiming that the sustainability of the higher billet prices would largely be determined by the new rebar prices in China during August. This price is significantly higher than last week’s reference level of $385-395/mt FOB.
Market sources said that one eastern India-based steel mill has concluded a contract for 30,000 mt at the higher end of the range with a China-based trading firm. Another western India-based steel mill has concluded two deals for an aggregate tonnage of 60,000 mt with Chinese buyers at a price estimated at $400-405/mt FOB, the sources said, which translates to $420-425/mt CFR.
A southern Indian state-run steel mill has concluded a deal for 15,000 mt with buyer Southeast Asia at $400/mt FOB, the sources added, but this has not been confirmed so far.
“Ex-Indian billet export prices are still finding acceptability in key markets. But exporters will have to be very strategic as the upside potential from current levels is very limited and will largely depend in Chinese domestic steel price trends in August. It might be noted that Chinese buyers are unwilling to conclude deals that will translate to a price above $425/mt on CFR basis, and this will keep local exporters’ pricing strategies in check in the short term,” an official at Rashtriya Ispat Nigam Limited told SteelOrbis.