The Indian billet export market has witnessed a robust tussle between sellers and buyers in key Asian markets with the former attempting to push up offers, but settling at lower prices in the end, SteelOrbis has learned from trade and industry circles on Wednesday, March 17.
The sources said that, while local integrated steel mills were seen to be attempting to push up offers to $570-580/mt FOB compared to $560-570/mt FOB in the previous week, buyers were setting valuations at much lower prices. With the local billet market running out of steam, sellers were settling at lower levels of $550-555/mt FOB, down from the deal level at $560-565/mt FOB last week.
“There has been a varying price trend evident in the case of ex-India billet trades. Chinese buyers were active accepting initial higher offers for ex-India billets. But the market reacted negatively towards the close of the week and trades were concluded at a discount to the early offer levels,” an official with Steel Authority of India Limited (SAIL) said.
“Exporters had to settle for deals at lower levels in the view of non-Chinese buyers putting ceilings on the achievable price on CFR basis, owing to the rise in freight rates. The reversal in local billet merchant sale prices also forced sellers to conclude trades at discounts towards the close of the week,” he added.
Sources said that for the first time in several weeks local billet prices have lost ground, moving down INR 500/mt ($7/mt) to INR 38,400-39,200/mt ($529-540/mt) ex-works. It was pointed out that, against backdrop of current local prices, export realizations have remained unviable unless sellers are able to conclude trades at the highest end of the current price level, as significant realizations in dollar terms have been eroded by the Indian currency appreciating strongly against the US dollar beyond the INR 73 to the dollar mark.
According to reports in the market, a government-run integrated steel mill prematurely cancelled an export tender 30,000 mt before the closing date, expecting bids received would be significantly lower than $560-565/mt FOB. The company will hold another tender for 60,000 mt of 150 mm billet in total with the selling price expected to be below $550/mt FOB, sources have said.
Sources said that an Odisha-based integrated steel mill has reported a trade of around 20,000 mt with an Asian buyer at a price of around $555-560/mt FOB for May delivery.
Also, a trade with a Singapore-based trading firm has been heard at $550-555/mt FOB for end-of-April delivery, the sources said, which has not been confirmed for now. The CFR level should be at around $590-595/mt or above without traders’ margins.
$1 = INR 72.60
