After a brief pause, large Indian mills returned to the billet export market, pushing large-volume offers, but meeting very limited success as buyers are awaiting a price correction, SteelOrbis learned from trade and industry circles on Wednesday, June 24.
Sources said that ex-India billet exporters are still targeting not below $470-475/mt FOB, but rare bids have been lower by $10/mt or more, belying expectations of improved realizations, as buyers are cautious since they expect a correction triggered by more sellers entering the market following the easing of geopolitical tensions in the Middle East.
The aggressive offers on the export front are led by a government-run mill which floated a number of tenders for 60,000 mt of billet in total which should be closed this week. But, for one of the tenders, the mill has failed to receive any firm bid and it is likely to be canceled “as it was on 100 percent advance payment basis, not by LC”, a trader in Asia commented.
According to trade circles, the same government mill has received highest bids in its second tender this week at just $455-460/mt FOB, below expectations and no confirmation is yet available on whether a sales contract has been signed with the highest bidder.
A private mill reported a sale of 30,000 mt of prime concast billet at $460/mt FOB, while another large Indian mill sold billet at around $462/mt FOB, the sources said, but this information could not be confirmed by the time of publication.
The SteelOrbis reference price for Indian billet stands at $460-470/mt FOB, down by $5/mt over the past week.
“Indian mills are pushing higher volumes overseas largely because of oversupply in the local market as the conversion rate of semis to finished long products is being reduced by secondary mills. But export price realizations are not improving week on week, as we see,” an official at an Indian producer said.
“We do not see an immediate rebound in price as buyers are awaiting a price correction since more sellers from Iran, China and Russia are entering the market as tensions in Middle East eases and trade flows may improve,” he added.
In the local market, billet trade prices have lost INR 200/mt ($2/mt) to INR 41,300/mt ($436/mt) ex-Mumbai and are down INR 200/mt ($2/mt) to INR 38,500/mt ($406/mt) ex-Raipur in central region.
