Despite improved buying interest from China, Indian billet exporters have generally failed to convert inquiries to deals following sharp differences over acceptable valuations, SteelOrbis has learned from trade and industry circles on Wednesday, July 7.
Sellers have insisted on not adjusting their offers below the $610-620/mt FOB mark and have failed to convert them into deals for base grade billet.
Despite sluggish merchant sales in the local billet market and mills lowering conversion to long products, Indian billet producers have been unwilling to adjust prices below the $600/mt FOB mark to match buyers’ valuations, as it would offer only nominal margins to offset rising costs of raw materials, particularly of iron ore for mills without captive mines.
“Chinese mills are increasing billet prices and import interest is rising. But the acceptable import price is not rising suitably. There are too many alternatives available for buyers, with limited scope for Indian exporters to adjust prices aggressively,” an official from Steel Authority of India Limited (SAIL) said.
The Indian steel producer RINL has received very low bids, which have not even touched $590/mt FOB for its 30,000 mt 150 mm billet tender launched last week.
Also, according to sources, another auction for 125 mm billet from another Indian mill, held earlier this week, has been canceled as the mill was “expecting minimum $600/mt FOB for base grade,” a source said.
“It is a waiting game for exporters. Chinese rebar prices need to move up further to support imported billet prices. With steel markets in key Asian regions including India rather weak in terms of demand and prices, there is a lot of IF billet floating around. Only a significant rebound in the long product market will bring about a balance in the current excess billet supply,” he added.
The tradable price level for import billet in China has reached $680-690/mt CFR on July 7, so market sources expect that some Indian sellers may be successful in signing deals in the near future.
Sources said that an eastern India-based steel mill has reported a trade for an estimated tonnage of around 20,0000 mt with a Taiwan-based buyer at a price of around $620/mt FOB, but this is including at least $10-15/mt extras as it was for wire rod production.
A southern India-based government run steel mill has reported a trade for 20,000 mt of 90 mm billet for September shipment at around $610/mt FOB, the sources added.
Also, a small parcel of Indian IF billet was sold at $640/mt CFR to China last week, but the quality of the material was said to be poor, and so the price does not reflect the real market conditions.