Seasonally weak demand in the local Indian long steel market as well as strong supply have caused Indian mills to become more interested in billet exports. As a result, billet export prices from India have become some of the most competitive in Asia recently.
A major BF-based steel producer in India has closed a tender for a little less than 20,000 mt of 125 mm 5SP billet at $413/mt FOB, market sources have reported to SteelOrbis. The importer is the large international trader in Asia. Taking into account that the freight rate is about $35/mt, this price is equivalent to $448/mt CFR.
As export sales of billets from India depend very much on the local Indian market which is weak at the moment, it is expected that Indian mills will be active in the export market for the whole of August. Other Indian producers have been offering base grade billets at $410-415/mt FOB. “The Indian domestic market is not so good, while the export market seems attractive,” a local source told SteelOrbis.
Moreover, some new players have entered the market. Vedanta, which previously was not in the long steel business, has already started to look for more customers. Vedanta bought troubled Jharkhand-based billet and long steel producer Electrosteel Steels (ESL) with a capacity of 1.5 million mt per year late last year and is ramping up its capacity. In March this year, ESL’s annualized steel production reached 1.4 million mt, while it was only about 600,000 mt before the acquisition. “Vedanta is on course to ramp up capacity at ESL to 2.5 million mt to 3 million mt by the financial year 2020 through a ‘small capex’ to unlock the benefit of scale and lower unit costs,” Arun Kumar, CFO of Vedanta, said.
