Indian integrated steel mills have marginally increased billet export prices during the past week, but the export market has fallen silent with producers pulling out of the market and buyers not willing to accept much higher levels, sources told SteelOrbis on Wednesday, September 9.
Exporting integrated steel mills have increased billet offers marginally by $5/mt week on week to $425-440/mt FOB, but trading activity has virtually dried up with sellers unwilling to conclude deals at lower levels in view of high domestic demand, while buyers’ maximum valuation at which they were willing to conclude deals were at $440-445/mt on CFR basis, equivalent to $420-425/mt FOB.
“Incentive for exports has diminished significantly over the past few weeks. The incentive has weakened following the government ceiling on export credit and ultimately its withdrawal, coupled with the strong appreciation of the rupee against the dollar. There is no scope for lowering ex-India billet prices to match buyers’ lower valuations,” an official at Jindal Steel and Power Limited (JSPL) said. “At the same time, there is a strong revival of domestic flat product demand. Our plants are working at optimal capacity. The present exportable volumes are to meet deliveries up to November. Thereafter, we need to maximize meeting domestic demand from our maximum plant capacity and hence overseas shipment is expected to be minimal,” he added.
“We are re-strategizing out semis export plans after entering the export markets during April-July this year. We are not present in the semis export market at present because as a government company our prime focus is to meet domestic demand,” an official at Steel Authority of India Limited (SAIL) said.
Market sources said that an eastern India-based steel mill has concluded a modest volume trade of around 8,000-10,000 mt with a trading firm at $425/mt FOB. Another Odisha-based steel mill has concluded a similar low volume deal at around $425-430/mt FOB to Asia.
The ex-India billet deal reference price has increased from $420/mt FOB last week to $425-430/mt FOB.
With integrated steel mills increasing captive conversion of billets and maximizing rolling mill capacities, lower merchant sales have triggered a surge in billet prices in the local market. Sources said that merchant billet sales prices have increased INR 700-1,000/mt ($10-14/mt) to INR 31,900-32,200/mt ex-works.
$1 = INR 73.60