Supported by sustained strong buying interest in key overseas markets led by China, Indian integrated steel mills have managed to slightly increase billet export prices and have been successful in increasing sales volumes during the past ten days, SteelOrbis has been informed on Wednesday, April 29.
Traders said that, having almost stopped conversion of billets to rebar in view of almost zero demand for construction material in the domestic market, Indian steel mills are seen to be maximizing realizations from billet exports with the total tonnage sold over the past ten days amounting to 143,000 mt, according to sources.
Sellers have kept increasing prices marginally. The latest bookings have been heard at $358-360/mt FOB against $355-356/mt last week. Offers have increased by $3/mt on average to $361-363/mt FOB. Most of the latest export trades saw significantly higher tonnages averaging around 50,000 mt per contract, indicating strong buying activity in Chinese and Middle Eastern markets, the traders said.
Market sources said that an integrated steel mill has concluded a contract for June delivery to China for an aggregate volume of 50,000 mt from two of its plants located in eastern India at around $359/mt FOB, which the sources said would translate to $370-373/mt on CFR basis. Most sources in China evaluate this price level as being “above the market price” as most bids are coming at $370/mt CFR and below.
According to market sources, a major Indian mill has concluded an export contract for 45,000 mt of billets from its eastern India-based steel mill for early June delivery at $360/mt FOB with Asian buyer, but this information was not confirmed by the time of publication.
The sources said that another western India-based steel mill contracted a volume estimated at 48,000 mt at $358/mt FOB last week. The shipment would be to a UAE-based customer and the CFR price level would be $370-372/mt CFR.
State-run long steel producer, Rashtriya Ispat Nigam Limited (RINL) has floated a notice offering sale of 60,000 mt of bloom for immediate delivery, with sources pointing out that the high volume on offer is largely owing to the steel company focusing on liquidating semis inventories instead of rolling to billet or conversion of billets to rebar.
Indian integrated steel mills are leveraging the sustained buying interest in overseas markets to manage inventories and curtail their own captive consumption. The dismal merchant sales of billets to local secondary mills are indicated by SAIL’s auction of billets held last week which failed to attract high enough bids, forcing the producer to cancel the tender.