Indian billet export activity has been hit this week by a weakening of buying sentiments in Asian markets, with Chinese importers staying completely away from the market, SteelOrbis learned from trade and industry circles on Wednesday, April 14.
Ex-India billet price levels have slipped to $585-595/mt FOB, down by $5-10/mt compared to the tradable level of $590-605/mt FOB last week, but suppliers have still failed to trigger any significant buying interest.
A tender from a state-owned Indian producer held late last week for 30,000 mt of billet was closed at $594/mt FOB, according to sources. The tender was for 100 percent advance payment, so the price level has been assessed by market sources as “good”. The previous tender was at $592.5/mt FOB.
Sources said that, with Chinese buyers out of the import market, buyers in other key Asian destinations have expected prices to come under pressure at least in the short term and have declined to conclude trades unless sellers offer discounts.
A government-run steel mill reportedly concluded a long-term supply agreement (six-month, starting June 2021) with a Chinese trading firm. Sources said that as per the negotiated agreement, the price would be based on the average ex-India billet price of the previous month with a provision of a two percent premium or discount to be negotiated between buyer and seller prior to the fixing of the delivery date. According to a steel sector analyst from a Mumbai-based financial services firm, the terms of the agreement finalized last week was a “win-win” for both sellers and buyers.
The lack of buying in China as seen this week will be short term and imports will bounce back, sources believe, but for now bids from customers in China have been coming at low levels - at $630/mt CFR maximum, according to trading sources.
Sources said that the only stray deal reported during the past week was by an Odisha-based private steel mill, which concluded a June shipment contract with an Asian based trading firm at around $580/mt FOB or slightly below.
Meanwhile, the billet price rise in the local market has paused with producers maintaining commercial sales prices at INR 38,600-39,400/mt ($514-525/mt) ex-works.
$1 = INR 75.10
