Indian billet exporters have maintained prices unchanged amid inactive market conditions, but lower prices are expected in the next deals when buying will revive, SteelOrbis learned from trade and industry circles.
Sources said that, despite a lack of buying activity during the past week, Indian integrated steel mills have maintained offers at $640/mt FOB or so amid definitive signals that buyers are looking at ex-India bookings over the next one week. But most market sources agree that the tradable level has slipped and the next deals will hardly be concluded at above $610/mt FOB for BF-based billet from India.
At least one trader and an official from a private steel mill said that the indications are that the rebound in rebar prices in China will trigger renewed billet buying, but ex-India offers would need to be corrected to become workable. Indian billet sellers would need to adjust offers lower for them to become acceptable to Chinese buyers and offset higher port charges levied as quarantine fees for ships originating from India, and buyers would largely refuse to bear this incremental logistical expense.
The current market assessment is that Indian billet exporters would need to adjust offers to ensure a CFR price of around $660-670/mt to ensure deals once Chinese buyers are back in the market, sources claimed.
Two major mills in India are holding tenders this week - one for 30,000 mt of billet and another for a smaller volume with the results expected later.
Meanwhile, close on the heels of completing two rounds of price hikes for long and flat products last month, integrated steel mills aggressively pushed up merchant billet sale prices to the secondary sector, in reaction to the expected 10-15 percent fall in steel output during the quarter ended June 30, 2021, sources said.
Local billet prices are at INR 38,300-39,100/mt ($528-539/mt) ex-works even though very few secondary mills were reported to be active in making fresh bookings. And the tradable level is definitely above INR 40,000/mt ($551/mt) ex-warehouse.
$1 = INR 72.60
