Ex-India billet offer prices have been “notionally” maintained at $510-520/mt FOB and the workable levels have remained at $500-510/mt FOB, but the market is almost fully at a standstill amid the all-round price depression in key Asian and Gulf destinations and Indian sellers have almost completely withdrawn from export activities, SteelOrbis learned from trade and industry circles on Wednesday, October 4.
Billet prices have slumped across Asia with deals being reported in the range of $505-510/mt on CFR basis (for Chinese origins and Russian origins last week) and Indian sellers have been unwilling to enter into “a price war” to push sales overseas at a time when mills have been getting “healthy realizations from high-volume local sales”.
Sources said that, even though the recent uptrend in the local billet market has been reversed, it still remains the main focus of mills and holds a better outlook for a rebound given the prolonged demand and price recession in overseas sales.
Any workable price below the $500/mt FOB mark ensures negative margin in real terms, with the net gain only being the benefit of the exchange rate with the rupee at a historical low of INR 83.20 to the US dollar.
“Even government mills have pulled out of semis exports after poor result from two consecutive tenders. Staying out of exports will be the norm for local sellers as pessimism seems to be deepening every week across Asia and the Gulf,” a source at a large Indian mill said.
Meanwhile, in the local market, the billet trade price is down INR 800/mt ($10/mt) to INR 45,500/mt ($547/mt) ex-Mumbai and down INR 600/mt ($7/mt) to INR 43,000/mt ($517/mt) ex-Raipur in the central region.
$1 = INR 83.20
