Sentiments in the India billet market have improved slightly with the resumption of inquiries from China, but this has not translated into improved price realizations, with private mills staying away from overseas sales amid rising local prices, while only tender sales have been reported over the past week, SteelOrbis has learned from trade and industry circles on Wednesday, December 22.
While the number of enquiries from China showed improvements over the past week, this did not offer sufficient headroom for sellers to attempt pushing up ex-India prices with buyers valuation ceiling being in the range of $620-625/mt on CFR basis in China and $635-640/mt CFR in Southeast Asia.
Ex-India billet prices are largely unchanged at $580-590/mt FOB and only one tender sale was reported in the market over the past week.
It was pointed out that falling prices of upstream materials like ferrous scrap are still weighing on prices of semis and importers in China ‘are still testing’ the market conditions with cautious contract conclusions. On the other hand, the rise in merchant sale prices of billet in the local market in India reduced pressures on private mills to increase export allocations.
“China has commenced imports of semis riding on improvements in the rebar market. But right now, interest in ex-India billet is low as buyers prefer alternative sourcing. The buying volumes have to consolidate at higher levels to impact ex-India prices,” a source at Steel Authority of India Limited (SAIL) said.
“Currently, we are in a lag between better sentiments and their impact on prices. Buyers are interested in imports, but not at higher prices,” the source said.
A government-run steel mill was able to conclude a trade for 30,000 mt of 150 mm billet with an Asian buyer at around $580-585/mt FOB, according to market sources, though this could not be finally confirmed by the time of publication. It is slightly lower than the previous tender at $590/mt FOB, but almost on a par with the tradable level last week. This price translates to around $630-640/mt CFR Asia, if adding the current freight from India.
In the local market, billet prices have surged INR 1,000/mt ($13/mt) to INR 42,850-43,100/mt ($567-570/mt) ex-works, even though the local rebar market has been showing divergent trends across regions. Sources at an eastern India-based integrated mill said that sellers have been attempting to nudge up prices of semis anticipating that long product prices have bottomed out and that some marginal losses in rebar were due to regional factors and in the medium term a demand revival from construction would help consolidate the market.
$1 = INR 75.60
