Indian mills have been successful in consolidating ex-India billet prices at higher levels amid rising buying interest in the Asian region, but sellers are mostly heard to be focusing on offering limited volumes available for overseas sales to distant emerging markets in the MENA region for higher achievable realizations, SteelOrbis has learned from trade and industry circles.
Ex-India billet prices have reached $750-760/mt FOB this week, versus $720/mt FOB late last week, with most sources saying that $750/mt FOB is a fair price for now and offers are already above this level. Prices have been more acceptable to buyers in the MENA region, following the drying up of Russian supplies, trade and industry circles said.
“The market dynamics are changing drastically since sanctions on Russia. Local sellers are continuously revising upward their overseas sales targets. Their only limitation is the extremely limited export surplus available up to mid-April, owing to strong price realizations in the local market for both flat and long products,” a source at state-run steel producer Rashtriya Ispat Nigam Limited (RINL) said.
“Local exporters have increased their footprint in the MENA region over the past few months. Turkey is the new emerging attraction for mills with an increased number of deals in the country even though average trade volumes are restricted by the low material available at mills in India,” he said.
“Once higher export allocations are finalized for the new fiscal year by March 31, sellers will be in a position to leverage higher volume offers to push up prices further. The general assessment is that $800/mt FOB can be very achievable in emerging markets as Russian volumes dry up. We hear that some ex-Russia volumes are still flowing into some Asian markets, but this is unlikely to be sustained as the full force of sanctions against the country takes root,” he added.
A western India-based integrated mill has reported a trade for 20,000 mt of semis with a Middle East-based buyer at $730-735/mt FOB for end-of-April shipment.
At least two market participants said CIS-based sellers had withdrawn from their prominent market in Egypt and that buyers from the latter are actively scouting for immediate delivery (mid-April) for a large volume estimated at 50,000-80,000 mt from alternative sources like India. Though the actual deals concluded over the past week could not be confirmed, sources said that some volumes have definitely been traded at $750/mt FOB or even above, though it is still seen that a few mills would have such large volumes available.
Meanwhile, in the local market in India, reacting to the skyrocketing prices of flat and long steel finished products, the merchant trade price of billets surged by unprecedented levels, with reports that at least two or three integrated mills suspending merchant sales and secondary rolling mills faced with a shortage of semis. In the eastern regional market of Rourkela, billet prices surged by INR 10,450/mt ($135/mt) to INR 58,400/mt ($759/mt) ex-warehouse, while they surged to INR 59,300/mt ($771/mt) ex-warehouse, a gain of INR 10,300/mt ($134/mt).
The highest trade price heard in the market was for ex-Mumbai billet to INR 62,000/mt ($806/mt) ex-warehouse, confirmed by at least two western India-based dealers.
$1 = INR 76.90
