Indian integrated steel mills have remained interested in billet sales abroad. Their latest booking prices are in line with the current offers, which means suppliers decided to step back from earlier attempts to increase prices. Exporters are waiting for a response from Chinese buyers, who came back from holidays today, May 6.
According to market sources, billet offer prices have been reduced by Indian integrated steel mills to $355-360/mt FOB compared to $361-363/mt FOB reported last week. As integrated steel mills had sharply reduced captive billet conversion to rebar as most rebar sales in local markets were from high inventories, they have needed to export semis. The latest deal prices have been at $358-360/mt FOB, corresponding to $370/mt CFR China or slightly above. At the moment, Indian exporters are considering negotiating at $365-370/mt CFR.
“It’s all about volume shipments overseas and not pricing. Higher billet exports even at lower prices are helping to maintain cash flows and maintain plant operations even at lower levels. The strategy of continuing operations of local steel mills is being supported by sustained strong buying of semis in key markets like China and other Asian countries,” an official at Rashtriya Ispat Nigam Limited (RINL) said.
“The fact that the Indian rupee is prevailing at a historical low against the US dollar is helping billet exporters to maintain positive realizations from overseas sales even after cutting prices,” he added.
Steel Authority of India Limited (SAIL), which concluded an export contract for 45,000 mt in the previous week, had quickly floated yet another export tender for 20,000 mt, with bids expected to close in mid-May. RINL has also floated an export tender for an estimated 35,000 mt.
Market sources said that the latest export deal for Indian billet was done at $358.5/mt FOB to China (corresponds to about $370/mt CFR) last week. An integrated steel company with a mill in the eastern state of Odisha has concluded a booking with an Asian buyer for 35,000 mt at $360/mt FOB.
According to a steel sector analyst with a Mumbai-based financial advisory firm, provisional industry estimates showed that Indian billet export bookings touched 300,000 mt in April this year. He said that exports during the current month are forecast to double, supported by the fact that Indian mills made huge bookings estimated at 180,000 during last week.