Indian billet exporters were successful in pushing up prices the past week riding on the back of favourable changes in the Chinese market, SteelOrbis learned from trade and industry circles.
Ex-India induction furnace billet prices surged to $670-675/mt FOB, with buyers predominantly from China accepting the higher offers. Major blast furnace producers have not announced their new prices so far, but taking into account sharp rise in the workable level in China their prices will be not lower than $730/mt FOB next week, sources have said.
“In view of weak domestic market conditions, the current focus for Indian integrated steel mills is to strategically increase export allocations for semis (billets) and finished products like hot rolled coil (HRC), demand for both of which is soaring in Asian markets,” an official from Steel Authority of India Limited (SAIL) said.
“The only possible negative to leverage the bullish export market is local steel mills risk of falling output over the current quarter in face of oxygen shortage. This can be the only limitation in increasing export allocations,” he said.
According to a steel sector analyst at a Mumbai rating firm, integrated steel mills will have sufficient volumes of billets to increase their offers to Asian markets as demand from secondary steel mills for conversion to rebar is very subdued. He said that the fast changing dynamics of the Chinese steel market is opening up a strong opportunity for ex-India billet as price differentials between ASEAN and non-ASEAN origin has narrowed.
Sources said that one trade has been done at $670-675/mt FOB for July shipment with China based trading firm. An eastern India based integrated steel mill also reported a deal to a trader at $665-675/mt FOB, the sources said. These deals were for IF billets.
“Some traders are holding positions of Indian IF cargos. But I think Indian IF cargo is super risky at the moment. Most IF mills are practically shut down or cut production significantly due to oxygen shortage. Also there are issues in India about labour, raw materials and logistics due to lockdowns,” an Asian trader said.
