India’s billet export activity is dominated by state-run steel mills. Though the latest tenders were closed at lower levels than targeted by mills last week, the optimism in the market remains. Private sector mills have been refraining from pushing volumes overseas at lower prices due to tight allocation, SteelOrbis has learned from trade and industry circles.
Ex-India billet prices have settled at $648/mt FOB, based on the latest tender closed this week, which is $7/mt below the average price seen last week (the range was $640-670/mt FOB, where the higher end reflected the mills’ target level). Nevertheless, market sources believe that the next offers from Indian producers will be even higher with sellers still aiming to achieve $670-680/mt FOB or even above in the export market.
A government-run steel mill which closed a spot export tender for 30,000 mt of prime 150 mm billet on February 15 is reported to have received a highest bid of $648/mt FOB for advanced payment, though the identity of the buyer could not be ascertained. Market sources believe that the material will be for the Egyptian market, where deals for ex-CIS billet were closed at $710/mt CFR last week. “They were looking for $670/mt FOB but, with China’s market down, they could not realize it,” an Asian source said, saying that the tender price was more realistic for the current market.
The latest tradable level for SE Asia was $690-695/mt CFR as the highest late last week, translating to about $645/mt FOB from India. At the same time, bids from China have been reported at very low levels recently after the sharp futures fall on Monday and Tuesday, at $660-665/mt CFR, according to SteelOrbis’ information.
Another trade for 20,000 mt of 90 mm ex-India billet was closed at $662/mt FOB for further sale into the MENA market.
The same government steel company also reported the next export tender for 30,000 mt of 150 mm billet, and is expecting to get higher prices.
“The sentiment among buyers in the Asian region is a little nervous following the sharp declines in futures in China and reported investigations into trading activity, and hence local sellers have shifted their focus to the MENA region,” a source at a state-run steelmaker said.
“We have heard of at least one offer to Asia at a level of $700/mt FOB. In the case of a rebound in China, such a price could be the next target,” the source said.
Meanwhile, in the local market the merchant trade price of billets has continued to gather upward momentum, with large integrated mills increasing captive conversion rates and reducing merchant sales, leading to tight supplies for re-rollers. Price have moved up INR 1,500/mt ($20/mt) to INR 48,550/mt ($633/mt) ex-warehouse in eastern India, while INR 50,000/mt ($661/mt) has been heard from the central regional market around Raipur, trade circles said.
