Indian integrated steel mills have attempted to increase billet export prices during the past week but, despite the revival in import interest from China, actual trading activity has remained below the expectations of exporters in view of the gap between offers and bids, and competition with other suppliers.
It has been learned from traders that, despite having set a target for the steady lowering of export allocations for November-December shipments, integrated steel mills have been taking a contrarian stance over the past week against the backdrop of low commercial sales to secondary rebar producers, the softening of local billet prices, and expectations of higher bookings in China.
Ex-India billet prices have increased from $415-420/mt FOB to $418-425/mt FOB, mainly based on suppliers’ hopes for a further market strengthening. State-owned mill RINL has closed a tender for 30,000 mt of billet this week and, though the final price has not been disclosed, some traders said the highest bid reached $418/mt FOB. As reported last week, before China came back from the holiday, most bids were at $410-415/mt FOB. According to sources, RINL has announced a new tender which will be closed next week.
Market sources and producers said that billet exporters will target higher prices at $425/mt FOB and above, which is equivalent to $450/mt CFR Asia. At the same time, though Chinese customers have been active in billet imports recently, they have preferred billet from Southeast Asia, which is not a subject to two percent duty. The latest deal has been at $445-447/mt CFR China from Vietnam, while another transaction has been rumored at $450/mt CFR, but it has not been confirmed and most Chinese traders said this level is high. Bids for Indian billet from China have been at $435/mt CFR or around $410-415/mt on FOB basis.
In contrast to revived export price levels, the commercial billet sales price in the local market has continued to weaken for the second consecutive week in reaction to the distressed rebar market and low bookings from secondary steel mills. Sources said that local billet prices have fallen by INR 400/mt ($5/mt) to INR 28,600-29,100/mt ($390-396/mt) ex-stockyard.
$1 = INR 73.40