Buoyed by increased trading activity in Asian markets and the successful closing of the latest export tender, Indian integrated steel mills have attempted to push up ex-India billet prices slightly but low export allocations for December-January have kept offered volumes on the lower side. Moreover, buyers have been cautious in accepting a further rise in prices.
The tradable price value for ex-India billet has increased slightly from $418-425/mt FOB last week to $420-425/mt FOB. And some integrated steel mills have been targeting $430-435/mt FOB versus $425/mt FOB last week. However, buyers have been keeping their price ideas at around $445-450/mt on CFR basis or $420-425/mt FOB from India.
One official at an exporting steel mill said that there were uncertainties in key overseas markets particularly in China where billet prices have been showing volatility, and higher ex-India billet prices might not find acceptance unless in the event either of a demand uptick or a fall in local production.
An export tender held by Rashtirya Ispat Nigam Limited (RINL) for an estimated tonnage of 30,000 mt of 150 mm billet has received the highest bid of $420/mt FOB on Monday from an Asian trading firm, against an internal reserve price of $418/mt FOB. According to sources, the material has been purchased for the Sri Lanka market.
Another deal has been heard to the Philippines at around $450/mt CFR, which translates to $425/mt or slightly lower on FOB basis.
“Most producers have reduced December-January export allocation and this is resulting in an average traded tonnage below the 40,000 mt mark. Integrated steel mills have a very limited exportable surplus as they are ensuring maximum capacity utilizations of their flat production conversion mills,” an official at Steel Authority of India Limited (SAIL) said.
In the local market, despite the low off-take by secondary steel mills owing to weak rebar prices, integrated mills increased merchant billet sale prices to offset the increase in iron ore prices. Local billet prices were hiked by INR 400/mt ($5/mt) to INR 29,000/mt ($395/mt) ex-stockyard, market sources said.
$1 = INR 73.50