Indian integrated steel mills have successfully pushed up billet export prices to the $600/mt FOB mark over the past week, supported by strong Chinese buying and the rebound in local Indian prices, although buyers from most other destinations have remained silent, SteelOrbis learned from trade and industry circles on Wednesday, April 7.
Sources said that imported billet prices are “on fire” in China, on the back of a combination of cutbacks in production by blast furnaces in some regions and domestic prices being steadily pushed up.
Indian exporting steel mills have also been aligning semis export prices at higher levels, having significantly increased base prices for finished steel products in the local market, triggering a rebound in local prices of semis.
Ex-India billet price levels have surged from $555-580/mt FOB reported last week to $590-605/mt FOB, SteelOrbis has learned. Both state mills and private producers have been interested in sales to China, where prices have reached a new peak.
“The structure of the global steel industry is changing very fast. Prices of finished products are rising fast,” an official at ArcelorMittal Nippon Steel Limited said. “This is leading to overall lower availability of semis in the market and, with Chinese blast furnaces reducing output, prices of semis are rising amid the shortage. This is indicated by surging prices of long products in China,” he added.
An Indian state-run mill closed a tender for 150 mm billet at $592.5/mt FOB to an Asian trading company on Monday, April 5. The same producer has issued another tender on Wednesday, but the result has not been disclosed for now.
Another state-owned producer had issued a tender for 125 mm billet, but it was cancelled early this week due to low bids. “They were expecting $595/mt FOB levels, but bids were low. However, it is achievable now, so I think they may retender,” a source said.
Most private Indian producers have been targeting $610-620/mt FOB. Taking into account that the lowest freight rate from India to China is $45/mt, offers from these mills are $660-665/mt CFR.
One sale of Indian billet was confirmed as having been done early this week at $648/mt CFR, which translates to slightly higher than $600/mt FOB. Some sources said that the higher level of up to $610/mt FOB has already been achieved, but this could not be confirmed by the time of publication.
Meanwhile, with integrated steel mills announcing large hikes in long and flat product base prices, merchant local sales prices of billets have staged a recovery after several weeks of losses, with the market expecting mills to increase captive conversion to finished products and to limit open market sales. Local billet prices have gained INR 1,000/mt ($14/mt) to INR 38,600-39,400/mt ($526-537/mt) ex-works.
$1 = INR 73.40