Despite weak market conditions and the still not very promising price outlook, Indian mills have increased billet export offer volumes over the past few days, seeing inventory build-ups and a surplus in the local market, SteelOrbis learned from trade and industry circles on Wednesday, November 23.
Among the stray deals over the past week, a private mill has reported a trade with an Asian buyer for 20,000 mt at around $475/mt FOB, down from the tradable level at $480-490/mt FOB last week. This week, the reference price has settled at $475-480/mt FOB.
Despite continued weak buying interest in Asia and the Gulf, a higher number of local mills have been present in the market with high-volume offers. Since early this week, a government-run mill has put up export tenders aggregating 50,000 mt of prime concast billet. Another eastern India-based mill has also floated an offer for 30,000 mt. All the offers are scheduled to close by next week, the sources said.
“There has been a sharp fall in trading volumes in the local market. Export offers are most likely a result of inventories rising,” an official at a government mill said. He said that the downtrend in the local market had significantly narrowed the differential in price realizations between exports and local sales.
“Sellers are expecting bids of around $500/mt FOB. But a more realistic assessment of successful bids would be in range of $470-490/mt FOB. The market is closely watching whether bids at such levels would be accepted or tenders cancelled. This will set a near term trend in overseas sales,” he said.
However, an official at a private mill held a slightly more optimistic outlook. “Mills with live export offers are hoping for a turnaround. Ex-China prices are slightly up, although supplies and trades are limited. Any workable price in the range of $480-500/mt FOB will work in favor of mills at a time when local merchant volumes are falling.”
Local merchant billet trade prices have remained under pressure from the softening of rebar prices and have lost INR 300/mt ($4/mt) to INR 44,700/mt ($548/mt) ex-Mumbai and are down INR 500/mt ($6/mt) to INR 41,800/mt ($512/mt) ex-Raipur in the central region.
$1 = INR 81.60