Local prices of Indian billet (grade IS2831, 100 mm x 100 mm) have consolidated at higher levels during the past week, gaining INR 100/mt ($1.4/mt) to INR 28,600/mt ($403/mt) ex-works, as integrated steel mills have been attempting to pass on the increase in their pig iron production costs to the sales price of value-added products, traders said on Wednesday, October 23.
According to the traders, the upward movement of local billet prices, however, has been limited by the lack of any export deals concluded by any of the large mills barring small-volume contracts concluded with buyers in neighboring markets like Nepal.
Overall billet offers from major Indian mills have been at $375-380/mt FOB, the same as last week. But sources said that Rashtriya Ispat Nigam Limited (RINL) has reportedly concluded a contract for shipment of 20,000 mt of billets to Nepal for prompt shipment (early November delivery). The deal is reported to have been concluded at around $398/mt FOB.
Some limited quantities have been traded at $370-375/mt FOB to Southeast Asia, but “it was induction furnace billet, which is why the price is lower,” an Asian trader said.
“Billet prices are critically poised at the moment, both in the local and global markets. In the domestic market, secondary steel mills are cautious about increasing billet purchases as demand and prices of rebar are facing limited upside potential. Ex-India billet offers are relatively stable even though active buying by China, seen early in the month, has waned during the past week,” an official at RINL said.
“We are expecting some support for ex-India billet export prices as offers for ex-CIS billets are moving up and also shipments from Iran are being transacted at higher levels of around $350-355/mt FOB. Indian producers can be expected to resume pushing volumes overseas after the Diwali holidays this weekend,” the RINL official added