Prolonged bearish conditions in the Chinese market have continued to put pressure on ex-India billets and the emergence of weakness in the local Indian market for semis has forced local sellers to cut offers to $600-610/mt FOB, while they had been shunning these prices in earlier weeks, SteelOrbis has learned from trade and industry circles.
Local Indian billet prices have entered a sharp correction phase losing INR 1,000-2,000/mt ($14-28/mt) across various regional markets to levels of INR 46,000-47,000/mt ($621-635/mt) ex-works, with some reports indicating prices as low as INR 44,000/mt ($594/mt) around the Raipur regional market in the face of the rise in mill-end inventories.
The tradable level for ex-India billet prices from mills went down to $600-605/mt FOB from $610-620/mt FOB last week. The sources said that the downturn in the local market and the fall in realizations prompted several integrated mills to return to the export markets and, amid Chinese pressure on prices, sellers were doing a u-turn to accept deals at as low as $600/mt FOB.
“There is an across-the-board softening in prices of direct reduction iron and billets, matched by a rise in mills’ inventories. Hence, with the fall in local sales realizations, sellers are returning to the export markets even at lower prices and volumes,” a source at government-run Rashtriya Ispat Nigam Limited (RINL) said.
“Chinese finished and semis price are falling and there is no appetite for imports. Hence, a lot of volume is flowing into other Asian markets. Hence, ex-India export volumes even after price cuts by sellers are very low,” the sources said.
A government-run steel producer, which floated an export tender for 30,000 billet for December shipment, targeting a price not below $600-605/mt FOB, has not been able to close the tender. Some market sources said that the highest bid was heard at only $590/mt FOB, SteelOrbis has learned.
As a result, the new tenders for 30,000 mt of 150 mm billet and 20,000 mt of 90 mm billets have been issued on Thursday with the final date of November 16.
An Odisha-based integrated steel mill reported a trade for 12,000 mt with an Asian buyer for December shipment at a price of around $600-605/mt FOB, market sources said. But this could not be confirmed by the time of publication.
