Indian billet exporters have continued to stay away from the Asian market owing to the surplus cargoes available in the region, the low trade activity in China and the widening differences in valuations between buyers and sellers, and at least one report of a cancelled export tender from a local Indian seller, SteelOrbis has learned from trade and industry circles.
The strong sentiment and outlook for prices of semis and finished steel in the local market in India have also prompted Indian mills to take their eyes off exports, particularly when alternative destinations like the Gulf region have been showing little interest in imports.
The prices for ex-India billet have softened nominally due to lower bids and falling prices from traders. As a result, this week the tradable levels have been at $620-625/mt FOB, down from $630/mt FOB at the lowest last week and from $630-640/mt FOB seen two weeks ago. Taking into account that the freight from India to Asia, to China for instance, stands at $70/mt at a minimum, the current levels correspond to $690-695/mt CFR.
“There are offers of RINL cargoes from traders [who are trying to redirect cargoes from China] at $690/mt CFR and $680/mt CFR,” a market source said. These offers were heard in Southeast Asia and Turkey. According to sources, at least 60,000 mt of billet bought from RINL tenders earlier have been offered.
But Indian mills are not ready to lower prices at the moment. “Very large volumes held by traders for China are being diverted to other Asian regions pushing down prices,” a source at a government-run steel producer said.
“At least one export tender for 20,000 mt by a government-run steel mill was heard to be cancelled after receiving the highest bid of $610-620/mt FOB against internal expectations of at least $640/mt FOB. The lack of interest and low bids were also because the offer was for 90 mm billet, against current buyers’ interest in 150 mm material,” the source said.
The steady rise in merchant sale prices of billet in the local market pushed by rising prices of direct reduction iron (DRI), scrap and coal have kept producers away from pushing volumes overseas by lowering prices. Local billet prices have edged up INR 500/mt ($7/mt) over the past week to INR 47,800-48,000/mt ($637-640/mt) ex-works, sources said.
$1 = INR 75.00
