Large Indian mills have returned to the billet export market aggressively pushing large volume offers but rare deals were reported to be successful only at discounts to offers, in view of trade diversion following fresh round of geopolitical tensions in the Middle East, triggering higher levels of competition among sellers in the Asian destination, SteelOrbis learned from trade and industry circles.
The SteelOrbis reference price for ex-India billet has been stable at $450-460/mt FOB, but this is mainly reflecting mills’ targets (higher end for large integrated mills, while lower end shows the level from IF mills), while bids have been already below these levels with buyers having multiple import options.
However, the sources said that greater clarity on acceptable price levels would be available once bids against offers aggregating estimated 150,000 mt by a government-run mill will emerge by the end of this week.
It was pointed that despite sellers pushing higher volumes for export sales, the fact that the largest government-run seller had internally set $450/mt FOB or below as the level, when tenders (for base grade) can be canceled, which indicates cautious expectations.
While billet prices were heard to be stabilizing in Asian markets, excess supplies provided headwind to any price rebound and hence buyers were unwilling to accept contracts without a discount, the sources said.
Deals working out albeit at lower price was indicated by a spot contract closed by a private IF mill for the Asian market at $445-450/mt FOB, while a similar tonnage earlier in the month was booked at $455/mt FOB, sources said.
“Prices are unlikely to see an immediate rebound as there is excess supplies locally and in key overseas markets. Indian mills are reducing captive conversion of semis while secondary mills are reducing merchant purchase of semis as demand for long products are falling. Export allocations were therefore higher,” an official at Indian mill said.
In the local market, higher supplies and low trade volumes have continued to put pressure on trade level billet price which lost INR 400/mt ($4/mt) at INR 39,400/mt ($399/mt) ex-Mumbai and also down INR 400/mt ($4/mt) at INR 37,600/mt ($390/mt) ex-Raipur in central region.
