Indian billet export activity has fallen silent during the past week, after buyers from China stayed away and sellers were largely unwilling to push sales at a discount, SteelOrbis learned from trade and industry circles on Wednesday, October 20.
Even the government-run mill which in recent weeks had been the most aggressive in submitting export offers was showing a slowdown. The mill had floated an export tender for 20,000 mt of 90 mm x 90 mm billet and it was heard to have extended the deadline for submission of bids from October 22, 2021, to October 29, 2021, expecting bids to fall below expectations of $630/mt FOB.
Sources said that a few deals fell through following differences over pricing with Chinese buyers seeking deals at $610/mt FOB or maximum valuations of $680-690/mt on CFR basis, but the Indian sellers declined to sell, setting a maximum discounted price of $630/mt FOB, only marginally down from deals concluded at $630-640/mt FOB a week ago.
According to local trade circles, Chinese buyers are unwilling to conclude import deals, anticipating a rise in production by local Chinese mills and given the weakness in their construction sector coupled with port issues. They said that there were offers for ex-Iran billet valued at $700-705/mt CFR China to meet stray demand, but Indian mills have been unwilling to match such levels, with Indian domestic demand and prices holding up.
“Sponge iron production is under pressure, hit by the energy crisis. Hence, integrated steel mills with captive power and coal mines are increasing merchant sale prices of billets and lowering export allocations,” a source at Steel Authority of India Limited (SAIL) said.
“There is bit of uncertainty over long steel prices in the third quarter, which is keeping buying in Asian markets at a low level. Indian mills are assessing and waiting for a Chinese rebound before reworking export allocations,” the source said.
Meanwhile, with secondary mills hit by the energy crisis and given the fall in availability of sponge iron, local billet prices have increased by INR 1,000/mt ($13/mt) to INR 47,300-47,500/mt ($629-631/mt) ex-works, trade sources said.
$1 = INR 75.20