Indian billet exporters led by government-run mills have returned with offers attempting to revive trade through aggressive pricing and expectations of improved market activity after the May Day holiday in China and other Asian regions, SteelOrbis learned from trade and industry circles on Thursday, May 4.
One government mill floated a tender-based export offer of 30,000 mt, while another state-run mill announced a spot sale offer of 20,000 mt and, even though no deals have been concluded to date, sellers are expected to accept prices in the range of $500-520/mt FOB, compared to $520-530/mt FOB a week ago.
At least one official at a government mill said that, while it is still too early and market activity has yet to gain momentum, given the bearish sentiments in Asia and the Middle East, Indian sellers are also likely to accept bids even below $500/mt FOB to revive buyers’ interest as acceptable valuations are currently ranging at around $520-530/mt on CFR basis for most Asian destinations.
The aggressive pricing of sellers is largely owing to the fall in merchant sales and prices of billet in the local market in India with secondary mills reducing bookings and given the rise in semis inventories at integrated mills.
“Spot sales negotiations are starting at $520/mt FOB but this is unacceptable to buyers and even sellers are pessimistic about achieving deals at this level. Our assessment is that the achievable price is around $480-500/mt FOB. A conclusive agreement will depend on the stock pressures of each producer,” an official at a private mill said.
The aggression in ex-India billet sales has been triggered by the continued downslide in local merchant sales prices. Billet trade prices have slumped by INR 1,000/mt ($12/mt) to INR 46,500/mt ($568/mt) ex-Mumbai and are also down INR 1,000/mt ($12/mt) to INR 44,800/mt ($548/mt) ex-Raipur in the central region.
$1 = INR 18.80
