Players usually active in exporting billet from India like government-run mills have completely reduced their exposure to exports, seeing low bids from major markets like China and the Gulf and also competition with lower-priced billets from Russia and Iran. Indian private mills are facing rising inventories of semis, as SteelOrbis has learned from trade and industry circles.
The reference price for ex-India billet has remained at $590-620/mt FOB as reported last week. One deal for a small tonnage for the East African market (which unusually pays higher prices) was done at $620/mt FOB by one of the Indian IF-based suppliers last week. But apart from that, no other deals have been reported so far.
The major issue for Indian exports is still unfavourable prices in the key sales destinations like China and the Gulf. Some sources have said that to sell to these outlets Indian mills have to drop prices to $540-560/mt FOB, as buyers have continued to bank on low prices in reaction to too many volumes floating in the market and lower-than-anticipated rebar demand in China.
It was pointed out that in the local Indian market billet trade prices have collapsed by another INR 1,400/mt ($18/mt) to INR 47,100/mt ($606/mt) ex-Mumbai and are down INR 500/mt ($9/mt) to INR 44,900/mt ($577/mt) ex-Raipur in the central regional market.
A spokesperson with a government mill, while underlining that it has not floated any export offer for the past several weeks, said that there are very little indications that prices have bottomed up in Southeast Asia and China, and so the mill is holding back offers even at the risk of rising inventories.
The spokesperson said that it was difficult for sellers to maintain positive margins at prices that major buyers are demanding and a rebound in the Asian region would be “very difficult” without the resumption of imports into China.
“The challenge in markets like China and the Gulf is that there are too many sellers active and a splash of ex-India volumes cannot be absorbed, and hence Indian sellers are not successful in concluding deals. Low pricing has limitations in driving sales in bearish market conditions,” a source at one mill said.
$1 = INR 77.77
