Over the past week, most large Indian mills have reduced their billet volumes offered for overseas sales owing to the combination of buyers' resistance to accepting higher prices in key destinations and surging sales volumes and prices locally in India, SteelOrbis learned from trade and industry circles on Wednesday, August 26.
Sources said that, while most large private mills have retreated from exports, diverting volumes for local sales, government mills have reduced export volumes after expectations of higher prices were largely belied.
Ex-India billet reference prices have settled at $445-450/mt FOB, inching up by $5/mt, but expectations of seeking deals above $450/mt FOB failed as buyers in Asian destinations were not accepting any increase despite a perception that the semis market may have bottomed out in the current cycle.
This week, India's RINL has floated an export tender for 15,000 mt of IS 14650 E 250 grade 150 mm billet. The latest date for submitting bids is August 26, but there has been no results seen yet. The price expected is still over $450/mt FOB, but the volume on offer is much less than in the previous tenders.
A government-run mill which held a previous export tender for 30,000 mt received a highest bid of $443-445/mt FOB.
Similarly, an export tender for 50,000 mt of bloom (250mm) also closed by a government mill late last week fetched a highest bid of $445-450/mt FOB.
Taking the cue that buyers overseas are not willing to accept any price increase despite the market being at a bottom, private mills have exited exports and are focusing on either increasing downstream rolling capacities using higher captive volumes of semis or are aggressively pushing merchant sales of semis to leverage the recent bullish trend over the past week.
Merchant local trade prices of billets have surged in line with the sharp rise in long product prices and secondary mills have been facing tighter supplies of semis for their own conversion. Billet trade prices have gained INR 1,500/mt ($16/mt) to INR 40,900/mt ($428/mt) ex-Raipur in the central regional market.
