Large Indian mills have eased off aggressive overseas sales of billet during the past week, after a few previous deals, since persistent low bids from buyers, expecting a further downtrend, had become unviable for most sellers, SteelOrbis learned from trade and industry circles today, July 9.
The SteelOrbis reference price for ex-India billet stands at $450-460/mt FOB, declining by $5/mt over the past week. The major large mills have been targeting $460/mt FOB at least, against most bids ranging at $450-455/mt FOB or even below, but these are not sustainable considering rising production costs, and hence most sellers have been taking a pause in order to reassess market conditions.
It was pointed out that a state-owned mill received the highest bids of around $455/mt FOB in its latest tenders for 3SP/4SP billets. Some sources have said that one limited tonnage was finalized at around $455-460/mt FOB and it has been taken for the Saudi Arabian market, but some sources said that they heard that latest tender was canceled. The latest offers for ex-China billet to Saudi Arabia have been heard at $495-500/mt CFR.
A contract for ex-India 5SP IF billet is heard to have been done at $475-80/mt CFR Manila, which translates to $450/mt FOB at the highest, but it was done over a week ago, market sources from the Philippines said. “I would say that IF billet should have a $5-10/mt discount to Chinese BF [billet], so, with the current $485/mt CFR for China’s 5SP, India is not offering actively as they will have to give below $480/mt CFR,” a Manila-based source said.
However, at the same time, at least two officials at large mills said that the current lull in trade activity is likely to be short-lived as oversupply of semis in the local market and the lower rate of conversion of semis to finished steel by secondary mills would force larger mills to return to exports once sellers worked out acceptable cost-price levels again.
Yesterday, RINL opened another tender for wire rod grade billet, for 30,000 mt of SAE-1008/1010/1018 150 mm billets for mid-August shipment.
“Mills are faced with multiple pressures of low bids, buyers’ resistance to current prices, excess supplies in the local market, and rising costs of production. Buyers are also retreating as they do not think the market is at a bottom and they prefer to defer deals. Sellers have moved to a wait-and-watch stance,” an official at an Indian mill said.
