Ex-India billet prices have increased slightly as at least two large mills are heard to have submitted higher offers, maintaining slight optimism for a trade revival, while a large section of industry claimed it to be “premature” and that the bearish mood was rooted in fundamental market weakness in key destinations, SteelOrbis learned from trade and industry circles on Wednesday, July 9.
Two large Odisha-based mills were heard to have submitted offers in the range of $425-430/mt FOB, taking their cue from successful small-volume deals breaking prolonged silent trade conditions and reports of improvements in ex-China prices. The current price is up by $5-10/mt from two weeks ago.
An eastern India based mill has reported a sale of 30,000 mt of prime billet at $427/mt FOB, instilling some optimism among a section of market participants, seeing it as a precursor of revived trade activity, while a larger section claimed it to be “premature and exaggerated” as the mood is expected to worsen.
The latter pointed out that the possibility of shipping line disruptions, following the attack on vessels by Houthi militants based in Yemen, could have a long-term impact on freight and insurance and offer strong headwinds to trade activities.
At the same time, possible production cuts in China would not be sufficient to offset the deeper demand weakness across the Asian markets, the sources said.
Meanwhile, Indian sellers were also forced to seek higher price overseas, impacted by the sustained downtrend in the local market. Sources said that large mills were facing a double bind. On the one hand, conversion of semis to long products is being lowered and inventories rising as integrated mills try to counter oversupply and weak prices of construction grade steel. On the other hand, merchant sales of billet in the local market are seeing declining margins.
Sources said that merchant trade billet prices have lost INR 600/mt ($7/mt) to INR 39,000/mt ($454/mt) ex-Mumbai and are down INR 200/mt ($2/mt) to INR 36,700/mt ($427/mt) ex-Raipur in the central region.
$1 = INR 85.85