Large Indian billet producers have continued to remain out of the export markets and are not submitting export offers amid fresh surges in domestic prices of semis and with demand outstripping supplies, while buyers in Southeast Asia are also heard to be retreating and not concluding bookings ahead of the long holiday in China, SteelOrbis learned from trade and industry circles on Wednesday, September 30.
Ex-India billet prices are nominally stable at $465-475/mt FOB, but mills have not been submitting any offers overseas as volumes available for captive conversion and commercial sales to secondary Indian mills for rolling have been lagging behind demand.
According to the sources, realizations from exports are lagging behind the domestic market and this gap has widened further after the robust gains recorded in billet trade prices over the past week.
Billet trade prices have surged by INR 1,900/mt ($20/mt) to INR 48,900/mt ($509/mt) ex-Mumbai and have risen by INR 1,200/mt ($13/mt) to INR 45,500/mt ($474/mt) ex-Raipur in central regional markets.
The sources said that private mills have not put up any volumes for spot export sales nor have government mills floated any export tenders over the past several weeks.
This is mainly because large integrated mills are consuming more semis internally to ramp up production of finished long steel products to meet backlogs in deliveries to domestic customers. This, in turn, is resulting in declining merchant sales to secondary mills for rolling and the latter having to pay a premium for ready deliveries of billets, the sources said, leaving almost no exportable volumes.
“Local billet sales prices are well above what can be secured through overseas sales. Exports are currently therefore not economically viable. The situation is unlikely to change because price recovery overseas is uncertain, while robust domestic demand seems sustainable,” a representative of an Indian mill said.
