Ex-India billet prices have been under big pressure from fresh market pessimism after tender-based export offers attracted below-expectation bids and with private mills pulling back spot offers in the face of mounting competition across Asian and West Asian regions, SteelOrbis has learned from trade and industry circles.
Sources said that a government-run mill which held a tender-based export offer of 20,000 mt on May 23 received the highest bid only at $478/mt FOB. According to a number of market sources, the mill has decided not to sell at such a low level since local prices are much better, even though domestic demand is fairly low. This price is compared to a similar tender bid earlier in the month at $485/mt FOB.
The reference billet price from India largely ranges at $480-495/mt FOB, compared to $485-500/mt FOB a week ago.
Sources said that an eastern India-based private mill was in negotiations for an export spot sale deal for 20,000 mt at $480-485/mt FOB with a Singapore-based trader, but there has been no confirmation that the deal was done. The supplier also pulled back a second spot offer for 30,000 mt without citing any official reason.
“Trade activity is falling with Asian buyers seeing a further downtrend. Local billet prices have once again entered a declining phase and mills have continued to seek deals overseas or face pressures of excess semis inventories as captive rolling mills are operating at lower capacity utilization levels,” a source at an Indian mill said.
“Ex-China prices are extremely aggressive. As a government-run mill, we have to stick to tender-based exports even though the number of bids received is getting very limited,” he said.
Meanwhile, the recent improvement in prices seen in recent weeks in the local market in India has been reversed by setbacks faced by secondary mills in terms of rebar price realizations, resulting in a sharp drop in merchant trade volumes of billets. Billet trade prices have declined by INR 1,500/mt ($18/mt ) to INR 46,100/mt ($557/mt) ex-Mumbai and are down INR 1250/mt ($15/mt) to INR 43,600/mt ($527/mt) ex-Raipur in the central region.
$1 = INR 82.80