Indian exporters led by government run steel mills continued to be interested in pushing higher volumes of billets in Asian markets to countervail softening of local finished steel demand and even lower price realizations being acceptable to sellers, SteelOrbis learned from trade and industry sources.
While local integrated mills were submitting their targeted price level at $615/mt FOB as the lowest late last week, bids at lows of $600-610/mt FOB were acceptable for the sellers now, as they were in need to check inventory build from reduced capacity utilization of their rolling mills.
Sources said that state run steel producer Rashtriya Ispat Nigam Limited (RINL) floated a spot sale offer of 30,000 mt of 150 mm billet against 100 percent advance payment, it was opened yesterday, while the previous auction opened late last week failed to find a winner. It is learnt that on the last date of submission of bids on September 22, a contract was yet to be signed between buyer and seller.
Market sources said that the highest bid from Asia should be at $600-605/mt FOB for now against an internal price floor of around $615/mt FOB from RINL. “They also didn't book 90 mm billets and wire rods in tenders [opened late last week],” a trader said.
Though there was some delay in pushing billets through tenders recently, market sources expect the situation will improve in the near future after some slight decrease in prices and better outlook for imports to China.
An eastern India based integrated steel mill concluded a spot trade for 20,000 mt with a China based trading firm at a price of around $600-610/mt FOB, the sources said. As a result, the ex-India billet reference price was settled at $600-610/mt FOB versus $610-615/mt FOB late last week.
“There has been buying interest over the past week. But the market is very price sensitive and improving price realization is not possible. Export volume being put on offer is mostly for inventory management,” an official with a government run mill said.
“However, the outlook for sustaining volume exports is negative. The crisis in Evergrande Group in China will impact the steel market. How much, we don’t know yet. But it will definitely impact import appetite in China,” he added.