Large Indian mills have continued to aggressively push billet sales overseas during the past week prompted by local oversupply of semis. However, even though bid prices in the international market have stopped falling, any sustainable market rebound is questionable at this stage, SteelOrbis learned from trade and industry circles on Thursday, July 23.
Sources said that ex-India billet tradable price levels have largely been kept stable at $450-460/mt FOB, but at least two tender-based export sales fetched highest bids of $455-460/mt FOB, buoying up sentiments and triggering expectations of a consolidation.
The sources cited reports that two export tenders of 30,000 mt each which had to be closed earlier fetched highest bids of around $455/mt FOB, according to some sources, and even slightly higher at around $460/mt FOB, according to some other sources. Though final contracts with buyers are yet to be signed, the sources said that the bids were in line with the internal price expectations of the mill and are taken as a positive indication of the market direction. “Previous tenders by RINL went to the GCC and Sri Lanka. I think the target markets of traders taking positions would be the same,” an Asian trader said.
The third tender, which has also closed but with no details yet available, will provide more definitive clarity on whether the overseas market is consolidating at a slightly higher level, the sources said.
Similarly, an induction furnace (IF) operator is also heard to have closed a spot sale for an undisclosed tonnage at $450-455/mt FOB.
“Sellers are diverting volumes overseas because of local oversupply. But optimism on price improvement has to be cautious. Upside potential for semis will be limited by the fact that finished steel prices are remaining weak to stable at best,” an official at an Indian mill said.
“Multiple sellers in key destinations and buyers' resistance to higher prices will offer strong headwinds to a rebound. Indian mills will remain conservative on achieving higher margins from exports,” he added.
Meanwhile, in the local market, trade-level billet prices have showed improvements, gaining INR 700/mt ($7/mt) to INR 40,100/mt ($416/mt) ex-Mumbai and rising by INR 200/mt ($2/mt) to INR 37,800/mt ($392/mt) ex-Raipur in the central region.
