Despite the pressures of mounting billet inventories and slightly lower prices, Indian billet exports have remained almost inactive in the absence of buying from China and cheaper options available for buyers in other Asian and Gulf markets, SteelOrbis has learned from trade and industry circles.
Ex-India billet prices are at $580-610/mt FOB, with the midpoint at $595/mt FOB, compared to $590-620/mt FOB a week ago, but no confirmed deals or firm negotiations have been heard in the market as buyers have remained cautious.
While Indian state-owned mills are still targeting prices at $610/mt FOB minimum, the tradable level is definitely below the $600/mt FOB mark, sources told SteelOrbis.
According to the sources in trade circles, given the unfavourable export and domestic market conditions for flat products, Indian private mills have been reducing outputs from their rolling mills and instead are increasing export allocations of semis, but the lack of buyers is leading to inventory pile-ups.
It has been pointed out that current ex-India billet prices are unremunerative for government mills, none of which have floated export tenders in the current month so far.
“The higher Indian exports of semis expected following the imposition of export tax on flat products is not taking off. Buyers in China are not responding to offers, citing Covid-related issues, while buyers in other key markets have cheaper options of ex-Russia material,” an official at a government-run mill said.
“In fact, reports of Indian private mills increasing export allocation of semis are further dampening sentiments in an already surplus market,” he said.
There is a pressure to sell overseas on private mills as local trade prices have continued to lose ground, moving down INR 800/mt ($10/mt) to INR 46,300/mt ($592/mt) ex-Mumbai and down INR 1,000/mt ($13/mt) to INR 43,900/mt ($561/mt), ex-Raipur in the central regional market.
“Local mills are not adjusting prices too much despite a lack of trading. So, it is more of a stalemate between buyers and sellers. The achievable target price of buyers [for IF billets] is around $540/mt FOB or below and local mills have to take a call on whether to trade at such levels where the margin earnings are only from the currency exchange rate,” an official at a private mill said.
$1 = INR 78.20
