After a bull run earlier in the month, India’s billet export activity has remained muted over the past week with integrated mills holding back stocks amid weak sentiments from the lower-than-expected rise in acceptable prices in key overseas markets and a fall in sales realizations to local secondary mills, SteelOrbis has learned from trade and industry circles.
Ex-India billet prices are reported in a range of $755-765/mt FOB, only marginally up from $750-760/mt FOB a week ago and, with sellers assessing the stability as just a “pause”, they prefer to hold back larger volume deals as the demand assessment in the MENA region and Europe continues to remain positive.
In the local market in India, billet prices are seen to have softened in tandem with rebar prices of secondary mills, but integrated mills are not concerned and have pulled back merchant sales as flat product prices have continued on a bull run, offering significant margins on value addition of semis, the sources said.
“Demand from buyers in markets supplied from Ukraine and Russia and emerging ones for Indian sellers continue to seek alternative sourcing and it is very positive for Indian sellers. But being a sellers’ market, deals are being held back unless achievable prices are showing a short-term appreciation. All eyes are on settling deals at $800/mt FOB,” an official at a government-run mill said.
“China has emerged as an exporter of semis and, though actual trade volumes are still low, buyers are awaiting their impact on prices and hence the pause in overall trading,” the official said.
A government-run mill which opened an export tender for 30,000 mt of 150 mm billet on March 15 received the highest bid of around $745-750/mt FOB, which was lower than expected bids at $760-770/mt FOB. Not high enough bids for ex-India billet were also connected with increasing freight rates. Freight for 30,000 mt of billet from India to Southeast Asia has increased to $70/mt from $45-50/mt in early March.
An eastern India-based integrated mill has concluded a May shipment trade with a Gulf-based buyer at around $750-755/mt FOB, sources said.
One Indian mill, Electrosteel, opened a tender for 20,000-30,000 mt of billet exports, with no results heard yet.
Meanwhile, in the local market, after an unprecedented surge in merchant prices of billets, a strong negative correlation has set in in the semis market, with secondary mills halting trades at peak prices. Sources said that billet prices are down INR 2,000/mt ($26/mt) to INR 60,000/mt ($783/mt) ex-Mumbai and down INR 1,000/mt ($13/mt) to INR 57,400/mt ($749/mt) ex-Rourkela in the east.
$1 = INR 76.60
