Indian billet producers cut export prices, but competition in Southeast Asia growing

Wednesday, 18 September 2019 17:20:04 (GMT+3)   |   Kolkata

Eastern India-based steel mills’ billet export offers currently range at $380-385/mt FOB, while they were mostly not lower than $390/mt FOB in the previous week. The price corresponds to about $410/mt CFR Southeast Asia and slightly below, but most buyers are cautious about purchasing Indian billet due to higher offer levels, especially following the recent booking from the Black Sea. A cargo of about 40,000 mt of ex-CIS billet from the Black Sea has changed hands in the Philippines at $410/mt CFR. “We received a number of offers at this level, but we are staying out of buying for a while,” a re-roller from the Philippines said.

Market sources said that Steel Authority of India Limited (SAIL) earlier this week floated an export tender for 16,200 mt but there have been no other reports from any of the other large steel mills of conclusions of any export bookings.

“Despite the lowering of Indian export offers, buyers in the Southeast Asian markets have been reluctant to confirm bookings as there is a lot of ex-CIS and ex-Iran material available in these markets,” an official at state-run Indian steel company said.

Local Indian billet (grade IS2831) prices have moved down by a marginal INR 200/mt ($3/mt) during the past week to INR 28,300/mt ($394/mt) ex-works, in the face of sluggish demand from non-integrated rebar producers, traders said on Wednesday, September 18.

 “With pig iron prices remaining stable, there are limits to the extent to which Indian billet producers can aggressively cut export prices,” a source said. But some additional discounts are still possible, if scrap prices will keep following their downtrend, market participants believe.

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