Indian billet exports have seen an improvement in activity amid low demand in the local market, but sellers have still been struggling to maintain price realizations, SteelOrbis learned from trade and industry circles on Wednesday, June 30.
Ex-India billet tradable price levels have come down to $595-605/mt FOB, decreasing by $5/mt on average from last week. Offers from large mills are in the range of $610-620/mt FOB, but most sellers are hard pressed to conclude deals above the $600/mt FOB mark with buyers largely setting a valuation ceiling of $650-660/mt on CFR basis in China and $670-680/mt CFR in Southeast Asia.
According to the sources, Indian exporters are settling for deals at around the $600/mt FOB mark, following the sharp fall in local billet prices in reaction to the slowdown in rebar demand owing to the slow pace of construction during the current monsoon season. They said that, with a lower volume of commercial sales in the local market, integrated steel mills are under pressure to cautiously conclude export deals at lower levels for inventory management reasons.
“The export market is showing signs of a turnaround in terms of buying interest, led by China. But prices are yet to recover,” an official with Steel Authority of India Limited (SAIL) said. “There are pressures of weak demand in the local market. Sellers are cautious in committing only small-volume deals. We are expecting a strong rebound in the next quarter as the outlook for imports into China is positive,” he added.
Sources said an eastern India-based steel mill has reported a trade with a China-based trading firm for an estimated tonnage of 20,000 mt at around $600/mt FOB for August shipment. Another Odisha-based steel mill has reported a trade at a price of $595-600/mt FOB, but the volume could not be ascertained in the market, the sources said.
One Indian mill is going to close two tenders for 30,000 mt each (one for 150 mm billet and the other for 200 mm material) by the end of this week.
Billet prices in the local market have weakened sharply over the past week in reaction to the softening of secondary rebar prices and construction activities in the western and eastern regions slowing down owing to monsoon rains. Sources said that local billet prices have moved down INR 1000/mt ($13/mt) to INR 39,500-40,500/mt ($531-545/mt) ex-works.
$1 = INR 74.30