Pressures in the Indian billet export market have increased during the past week and sellers have cut prices, but have still failed to trigger buying activity, prolonging the inactive market conditions, SteelOrbis has learned from market sources.
Amid reports of Chinese steel mills slashing local billet prices and new rules for Indian cargoes coming to China, importers have been in no mood to commit trades.
Select Indian integrated steel mills have cut billet prices to $620/mt FOB compared to offers at levels of $640/mt FOB a week ago, but “lower ex-India prices were largely notional as neither sellers were willing to push trades at such lower levels, while buyers, particularly in China, were unwilling to commit trades at a time when local prices were falling,” a source commented. The SteelOrbis reference price has been settled at $610-620/mt FOB.
At least two sources confirmed that an Indian state-run steel mill cancelled an export tender floated during the week for 30,000 mt. Though no official reason was cited for the cancellation of the tender, sources said that bids were not above $600/mt FOB, which was too low for the seller.
“With local Chinese mills cutting billet prices, we work out that the landed price of imports is at a premium of at least 7-10 percent of local prices currently. Weak futures are also impacting the market a lot,” an official at Steel Authority of India Limited (SAIL) said.
“There is not much downside leeway to reduce billet export prices considering our higher input costs. Most exporters will have to wait and bide the market conditions before pushing supply contracts,” he added.
Meanwhile, in the local market, merchant billet prices have continued to harden riding on the back of renewed bookings by secondary steel mills readying to increase their plant outputs, responding to the easing of economic restrictions. Billet prices of integrated steel mills have moved up by INR 1,000/mt ($14/mt) to INR 40,000-41,000/mt ($549-563/mt) ex-works, sources said.
$1 = INR 72.80
