An eastern India-based steel mill has submitted billet offers at $375-380/mt FOB, which is equivalent to $400/mt CFR and slightly higher, $5/mt below the level in the previous week, but buyers have not responded as they have been seeking shipments at around $360/mt FOB, SteelOrbis has been informed.
“We are waiting and watching billet prices in key markets, like Southeast Asia and neighboring countries. There are a lot of ex-Iran billet offers in key markets. Even Chinese steel mills are booking ex-Iran billets,” an official at Indian producer Rashtriya Ispat Nigam Limited (RINL) said.
The local prices of Indian billet (grade IS2831, 100 mm x 100 mm) have continued to soften during the past week, moving down by INR 200/mt ($3/mt) to INR 28,100/mt ($396/mt) ex-works amid oversupply of pig iron and limited export activity, traders said on Wednesday, September 25.
The traders said that most integrated steel mills have been facing falling commercial sales of pig iron, forcing them to increase capacity utilization of captive conversion to billets, thereby putting supply-side pressures on billet prices.
Citing examples of excess of pig iron at producers, the traders said that less than 40 percent of the total volume of pig iron put up for e-auction by Steel Authority of India Limited (SAIL) during the past week has been sold. Similarly, an export tender for 25,000 mt of pig iron from RINL was canceled during the past week owing to lower-than-expected bids.
This is an indication of the slowdown in commercial sales of pig iron leaving producers with little alternative but to increase their own conversion of billets even though off-take for billets for rebar value addition has remained at a low level, the traders added.
$1 = INR 70.96