Indian billet exporters have aggressively pushed up prices over the past week, riding on the back of the surge in local prices and the anticipated fall in supplies, but export contracts have been concluded at conservative levels, SteelOrbis has learned from trade and industry circles on Wednesday, February 24.
Sources said that local billet prices have surged by INR 3,000/mt ($41/mt) to INR 37,400-38,200/mt ($516-527/mt) ex-works, on increased demand and anticipation of short supply to emerge with reports indicating that several secondary steel-making hubs in the country are facing a power crisis, impacting their operations.
With export allocations expected to fall as a result and emerging trends of China shifting to increased billet imports and lower scrap purchases, Indian billet producers have increased export offer prices to $535-550/mt FOB, up from offers at $520-530/mt FOB a week ago.
No confirmation has been available of successful deals at the higher end of the range and most confirmed trades were at the lower level. Nevertheless, compared to deals closed last week in the range of $510-520/mt FOB, the tradable value has increased to $530-540/mt FOB, according to sources.
As SteelOrbis reported last week, the two tenders of a state-owned mill were closed at $511/mt FOB in the first half of last week and at $519/mt FOB in the second half of the week.
According to two traders, it was heard in the market that two eastern India-based integrated steel mills submitted offers at as high as $550-560/mt FOB to Chinese trading firms, but no confirmation was available of successful trades at this level, with the sources claiming that acceptable valuations for Chinese buyers were around $570/mt on CFR basis maximum. This corresponds to about $540/mt FOB, considering the increased freight rate (from $25/mt to $30/mt).
The sources said that an eastern India-based secondary steel producer reported a trade to China at around $530-535/mt FOB. Also, some small-volume deals have been rumoured to the Asian region at $530-540/mt FOB.
$1 = INR 72.50