Indian billet export prices have shown divergent trends during the past week with local exporters supported by better sentiment in China, but facing low bids from other Asian markets, leading to a widening of the price range for sales to different destinations, SteelOrbis has learned from trade and industry circles on Wednesday, March 24.
The general price range for ex-India billet is $545-575/mt FOB. The higher end of the range corresponds to the price level for the Chinese market only, according to sources. The lower end of the range is $5/mt below last week’s level.
A few private Indian integrated steel mills have been trying to push sales to China at $570-580/mt FOB. However, Indian exporters have been forced to adjust offers to other key Asian and Gulf markets as buyers have insisted on discounts to offset the increase in freight costs, which, according to market estimates, have risen by 5-7 percent for shipments from the Indian east coast to the Southeast Asian region.
According to sources, the softening of local billet prices in response to the weakening of finished steel product prices has prompted exporters to adopt a wide pricing range strategy to keep semis inventories at comfortable levels. Local Indian billet prices are down INR 300/mt ($4/mt) to INR 38,100-38,900/mt ($526-537/mt) ex-works.
Sources said that a southern India-based government-run steel mill has closed an export tender for an estimated tonnage of 30,000 mt of 150 mm billet with the highest bid received from an Asian buyer at a price reported at $545/mt FOB or below, according to sources.
In addition to this, the reports in the market indicate that another Indian state-owned steel mill was offering a smaller volume of 125 mm billet under tender and, though some sources said that it was closed at $550-555/mt FOB, this could not be finally confirmed by the time of publication. “Outside China, the market is super quiet. The Philippines are preparing for another lockdown. Indian 125 mm billet was offered at $605/mt CFR manila, with no takers though,” a trading source said.
In Thailand and Indonesia, the possible price for Indian 150 mm billet was estimated by market sources at only $580-585/mt CFR, with the freight up to $40/mt.
An Odisha-based integrated steel mill has reported a trade of 25,000 mt to China at $570-580/mt FOB, with the market estimating the freight charges to be not less than $35/mt, and so the CFR price was slightly below $610/mt. Another eastern India-based private steel mill has reported a trade to a trading firm close to this FOB level too.
“In an emerging trend, Chinese appetite for semis is increasingly being met by blast furnaces in Vietnam, Indonesia, India and Russia - in roughly that order. Data available here indicated that Chinese billet imports in 2020 were above 10 million mt and this is forecast to keep increasing in view of Chinese steel mills’ blast furnace output restrictions,” an official at Steel Authority of India Limited (SAIL) said.
“This is a big positive for the export of semis in India, where pent-up demand for finished steel is running out of steam and most primary producers are maintaining plant output. Improved export shipments in the near term can only increase operational viabilities when domestic demand is uncertain as was seen around the middle of last year where a rapid increase in overseas shipments kept local steel mills afloat,” he added
$1 = INR 72.40