Ex-India billet prices have showed stability over the past week, but sellers have eased their aggressive push for export sales, facing limited success in passing on higher production costs to buyers in key destinations, with workable prices continuing to be on the lower side and below expectations, SteelOrbis learned from trade and industry circles on Wednesday, June 10.
Sources said that, even though the number of sellers active in export markets is fewer than early in the month, ex-India offer billet prices have been kept unchanged at $470-480/mt FOB. But buyers have continued to resist higher prices, expecting a correction round the corner, while sellers have been withdrawing from continuing discounted sales under pressure from the rising cost of production.
It was pointed out that an eastern India-based mill concluded a trade for an undisclosed tonnage at $468/mt FOB. This level was insufficient for most mills to ensure margins, offsetting higher production costs.
At the same time, market sources have been watching the situation regarding deals already signed by the state-owned mill RINL. After a fatal accident at the Vizag plant, some market sources have started to expect disruptions of export supply. But major buyers polled by SteelOrbis have said that they do not see any changes under their contracts for billet from India. “They'll have to operate from the second available smelter,” an international trader said.
The SteelOrbis reference price for ex-India billet has been stable over the past week at $465-475/mt FOB.
“There is an oversupply of semis that is not being absorbed in the local market, as secondary mills are curbing output of rebars amid weakening prices and rising inventories. At the same time, export margins are not improving to compensate for higher production costs. There are limits to pushing higher volumes in overseas sales at lower realizations and mills are therefore taking a pause from offering volumes for export and are reassessing options,” an Indian source said.
