Indian billet exporters attempted to push up billet prices over the past week, seeing higher prices to be absorbed in view of production cuts by Chinese steel mills, SteelOrbis learned from trade and industry circles.
Indian integrated steel mills increase prices to $610-620/mt FOB in fresh deals to China, up by $10-20/mt from the level of $590-610/mt FOB seen last week. A number of new offers are coming at $620-640/mt FOB at the moment.
“Normally, a production cut by Chinese steel mills and lower liquid steel output leads to higher import demand of semis like billets for rolling mills and Indian exporters are banking on such to push up prices,” a Mumbai based secondary steel exporting mill official said.
“The demand for ex-India billet is good. But an increase in price realizations is not as good as expected. Buyers are seeking deals only at lower end of the offer range,” he added.
According to an official from Mumbai office of a Singapore based trading firm, Chinese buyers have definitely increased import activity and will sustain it in the coming months as production cuts take effect.
Indian steel mills are facing slowdown in local market and there is a lot of billet available for exports. The two will have a balancing effect on prices. Export volumes will see a rise, prices not so much, a source said.
At least 80,000 mt of Indian billet have already been booked to China this week.
A private Odisha based steel mill commenced sales negotiations with a China trading firm for 30,000 mt at initial price of $640-650/mt FOB, but the deal was heard to have been concluded at price of around $620/mt FOB. Some sources said that the final sales volumes was increased. The CFR price has been heard at $700-705/mt CFR China in this deal.
Another India based steel mill concluded a spot export sales contract for estimated tonnage of 20,000 mt at $620/mt FOB also to China.
In addition, information about the new billet export tender from Indian state-owned mill RINL has been heard. According to sources, the final price for 30,000 mt billet lot was $605/mt FOB, but this could not be confirmed by the time of publication, some sources said that the final price was higher – at $610/mt FOB minimum. The previous tender of the same mill was closed at $598/mt FOB late last week.
The quarantine is still required for Indian cargoes coming to China, which can “potentially be as much as 21 days,” a source said, but “neither exporter nor vessel owner is responsible for waiting if incurred. 100% will go on the buyer.” That is why some “international traders willing to book for Indian cargos are not willing to take demurrage/detention risks,” another source said.
In other countries in Asia, demand for Indian billet may also improve. The last bookings from India to Taiwan were at around $680/mt CFR, but as China is accepting higher prices now, the new deal price level in rest Asia may improve to $705-710/mt CFR.
