Indian billet exporters have successfully pushed up prices above the $500/mt FOB mark despite the weakness in the Chinese market, but banking on the revival of local rebar prices and Asian buyers accepting higher valuations and the current market facing tight supplies, SteelOrbis has learned.
Market sources said that ex-India billet export prices have increased to the range of $520-530/mt FOB, up from offers at $480-500/mt last week, largely amid a combination of factors like continuously surging international scrap prices, the emerging tightness in the local rebar market and higher billet merchant sale prices in India, low export allocations to keep overseas supplies limited, and Asian buyers largely accepting higher offer levels.
“The only negative sign is weak prices in the Chinese markets. But we do not think that this will have an overall impact in international trades in semis. Asian demand remains strong and China will rebound soon. Indian integrated steel mills are comfortably placed now with the rebar market improving, local billet prices gaining and overseas buyers continuing to submit bids at higher levels,” an official at state-run steel producer Rashtriya Ispat Nigam Limited (RINL) said.
“By keeping export allocation low, Indian exporters are ensuring that current tight supplies are maintained over the medium term and this will ensure little downside risks to billet prices,” he added.
Sources said that a government-run steel mill has concluded an export trade with an Asian buyer for 30,000 mt for March delivery at a price of around $530/mt FOB. An eastern India-based private integrated steel mill has reported a trade of around 25,000-30,000 mt of billet with an Asian buyer for end-February delivery at a price of around $525-530/mt FOB, the sources said. This price level corresponds to around $550-560/mt CFR.
Meanwhile, billet prices in the local market have continued to climb gaining INR 500/mt ($7/mt) to INR 36,500-37,000/mt ($496-503/mt) ex-stockyard in response to the improvement in secondary steel rebar prices and surging scrap prices, market sources said.
$1 = INR 73.60