Ex-India billet offer prices have been kept stable at increased levels over the past week, but more sellers have been seen to be offering higher volumes for discounted sales, faced with a slowdown in domestic merchant sales and with secondary mills lowering conversion amid weakening finished steel prices, SteelOrbis learned from trade and industry circles on Wednesday, May 6.
Sources said that, while ex-India billet offers have been kept stable at higher levels of $480-490/mt FOB, negotiations have mostly been held at lower discounted levels after large-volume tender-based exports received lower bids than expected.
But despite the disappointing export margins, sellers have continued to offer large volumes for export amid oversupply of semis with secondary mills reducing captive conversion to check rising inventories of finished steel.
Government-run steel producer Rashtriya Ispat Nigam Limited (RINL) has led in aggressive export sales of billets, with its two new tenders aggregating 90,000 mt, bids for which are still ‘live’.
This came close on the heels of RINL’s two tenders also aggregating 90,000 mt which expired in the past week, with reports indicating that the highest bids received did not exceed $440-450/mt FOB, far below the seller’s expectations.
An eastern India-based integrated mill reported a sale at $460-470/mt FOB, while another Odisha-based mill reported a sale at an even slightly lower level, the sources said.
“There are more sellers active on the export front as domestic prices of semis are weakening along with the slowdown in merchant trade. Mills are slowing down output of finished steel, lowering the demand for semis in the local market. But buyers in key destinations for exports are still very price-sensitive and are resisting higher prices, and only discounted sales are successful,” a seller said.
The SteelOrbis reference price for ex-India billet has settled at $470-490/mt FOB, with the midpoint at $480/mt FOB.
Meanwhile, in the local market, billet trade prices have entered a firm downtrend, losing around INR 300/mt ($3/mt) to INR 44,700/mt ($469/mt) ex-Mumbai and down INR 500/mt ($5/mt) to INR 41,250/mt ($433/mt) ex-Raipur in the central region.
