India’s billet export trading has been weak during the past week amid a combination of Chinese buyers’ resistance to higher prices and the reduction in volumes offered by Indian domestic integrated steel mills as they have been securing higher prices and margins from local sales, SteelOrbis learned on Wednesday, August 12.
The workable price level for Indian billet is at $405/mt FOB, compared to $400-405/mt FOB last week.
Sources said that local billet prices have continued to surge, gaining INR 750/mt over the past week to INR 30,000/mt ($401/mt) ex-works, while some sources have reported prices at INR 30,500/mt ($408/mt) ex-works.
An official at an integrated steel mill said that the pressures to ship higher volumes of semis overseas have eased over the past few weeks in view of rising finished steel prices in the domestic market. At the same time, Chinese buyers have generally rejected higher prices, while export margin realizations are less compared to a couple of months ago.
The official pointed out that most integrated steel mills are almost fully booked for September shipment and are well placed to take a pause from accepting fresh bookings at a time when buyers are not willing to deal at higher prices, and await the next bull trend in the overseas markets.
Sources said that an eastern Indian-based steel mill concluded a small export contract at around $405/mt FOB and another western India-based steel mill reportedly concluded a trade for 15,000 mt at close to $410/mt FOB, though in general the tradable value is hardly above $400/mt FOB.
A Chinese trader said that most offers for Indian billet are at $430/mt CFR and above, while the “reasonable level for buyers is still at $426-427/mt CFR.”
A southern India-based state-run steel mill concluded a deal for 15,000 mt of slabs at price of $420/mt FOB with a reportedly Chinese trading firm, although as a government company the seller did not officially disclose the buyer’s identity.
“The Chinese market will remain important for us. But with demand for finished steel rising in the local market, our exports will only be upon securing a good price and export margin realizations,” an official at Jindal Steel and Power Limited said.
$1 = INR 74.80