The sharp declines in the billet market in China and buyers in other Asian markets staying away from imports anticipating a further fall in prices have prompted Indian mills to largely withdraw offers or lower prices to push limited volumes overseas, SteelOrbis learned from trade and industry circles on Wednesday, November 3.
The tradable level for ex-India billet prices from mills are down to $610-620/mt FOB, compared to $620-625/mt FOB a week ago. With the freight from India to Asia at around $70/mt, this level corresponds to $680-690/mt CFR. But taking into account the still big volumes of ex-India billet offered by traders who are trying to redirect cargoes purchased for China, mills’ offers have been not attractive for customers. A position cargo of 15,000 mt of ex-India billet was sold to Indonesia at $660/mt CFR.
For mills, with local sales realizations being at a high of INR 47,000-48,000/mt ($629-643/mt) ex-works, export incentives are minimal, prompting at least one government-run mill to cancel an export tender for 20,000 mt of 150 mm billet for which the last date for submission of bids had been set for November 1, the sources said. Last week, only one deal for 90 mm billet was done at $612/mt FOB.
“Chinese buyers have almost stopped import trades. This has resulted in a lot of volumes getting diverted to other Asian markets, putting prices under pressure,” a source at state-run steel producer Rashtriya Ispat Nigam Limited (RINL) said.
“Indian mills are seeking alternative markets in the Gulf. But volumes are very low. Direct reduction iron (DRI) prices are getting stronger, supporting strong local billet prices, and hence mills are under no pressure to drastically cut prices and ship overseas,” the source said.
An eastern India-based integrated mill has reported a trade of BF billet at around $610/mt FOB, market trade circles said.
An Odisha-based mill is heard to have concluded a modest-volume deal for 10,000 mt with a Gulf buyer at around $620-625/mt FOB, sources said.
$1 = INR74.70