Indian integrated steel mills aggressively stepped up billet exports during the past week in reaction to fresh surge in Chinese buying activity and even though this triggered some buyers’ resistance in other markets. Exporters increased prices as well as volumes on offer, SteelOrbis learned on Wednesday.
Indian integrated steel mills increased billet export prices to the range of $385-395/mt FOB during the past week compared to $375-380/mt FOB in earlier week, at least one trade was rumored touching the $400/mt FOB mark by an eastern India based steel mill.
However, while both number of transactions and volumes traded with Chinese buyers significantly improved over the past week, buyers in other Asian and Gulf markets were showing resistance to higher prices.
The sources said that rebar prices in China continued to remain strong and backed by higher input costs, interest in imported billet for downstream value addition was positive in view of health margins in such value addition by local steel mills. The tradable value to China increased to $410-415/mt CFR this week compared to around $405-410/mt CFR last week.
Market sources said that a southern India based state run steel mill concluded a contract for 35,000 mt for September with a China based trading firm at price range of $390-392/mt FOB with sources attributing the price at higher range for large dimension 125x125 mm billets on offer. This level translates to $410-415/mt CFR China.
An eastern India based steel mill finalized a supply contract for 40,000 mt at $400/mt FOB with Chinese buyer for September-October, the sources added, but this level seems to be high in general for the current market condition and has not been confirmed by the time of publication at the buyer’s side.
State run Steel Authority of India Limited (SAIL), which had floated an export tender for 20,000 mt, reportedly received highest bid at $388-390/mt FOB from a Singapore based trading firm with supply contract with Chinese customer.
Sources said that at least two steel mills under SAIL floated export tenders of combined tonnage of 35,000 mt which was expected to close by this current month-end.
A western India based integrated steel mill finalized a 25,000 mt supply contract with a Chinese importer at estimated price of $385-388/mt FOB last week, which translates to about $407/mt CFR, as SteelOrbis reported earlier.
“The renewed Chinese buying despite tensions between the two countries is positive. But aggressive Chinese buying and increase in export prices by Indian exporters is proving to be a negative in other Asian markets where buyers are resisting and declining to conclude contracts at any price that breaches the $400-410/mt on CFR basis. This can have a downside in exports in case of any withdrawal of Chinese buyers and single market dependency,” an official with Rashtriya Ispat Nigam Limited (RINL), a state run semis and long product producer said.