India has continued to export billets with more sellers attempting to push sales overseas amid the current domestic slump, but deal prices have remained below expectations in line with negative sentiments in the Middle East and Southeast Asia and the impact of the holiday period in China.
Sources said that a number of private and government-run Indian mills have been active in spot offers and tender sales. The lowest offers have been in the range of $515-520/mt FOB, unchanged from earlier weeks, but actual deals (for IF billets mainly) have been reported in the range of $500-505/mt FOB, while bids for BOF billets have been at $510/mt FOB at the highest. So, the price range for ex-India billet has settled at $500-510/mt FOB with the lower end of the range losing $5/mt over the past week.
There have been rumors that a government-run mill failed to close its last tender for 30,000 mt of 150 mm billet. A number of trading sources said that the producer’s target level was up to $540/mt FOB and that the lowest acceptable level did not go below $525/mt FOB. But the highest bid received was $510/mt FOB. Also, at least one source said that RINL “has started their third BF and can produce 200,000 mt of billets every month, so they will be more active in exports.”
The government-run mill floated another export tender for 15,000 mt of 90 mm billet with a source claiming that the internal target price was $500-515/mt FOB, indicating pessimism over realizations despite higher export activity.
An Odisha-based mill is heard to have concluded a trade for 20,000 mt at $503/mt FOB and the targeted destination is MENA, according to sources, with the price slightly lower than $510/mt FOB for a similar tonnage to the same destination in earlier weeks.
“Even as domestic billet prices keep falling below the three-year low, more mills are increasing exposures to exports. To some extent, it is getting counter-productive with the workable price dipping. Sentiments in Southeast Asia are bearish, expecting prices to decline further on cue from China once business activity revives after the holidays,” an official at a private mill said.
“Of course, one can say that the current weak price comes at a time when trade activity is lower and the trend can change quickly if prices and futures contracts rebound in China. But our assessment is that, with more sellers from India and higher ex-Iran volumes in the market, trade will be brisk but at lower prices,” he said.
Meanwhile, in the local market, billet trade prices fell further below the three-year mark, losing INR 500/mt ($6/mt) to INR 41,300/mt ($497/mt) ex-Mumbai and down INR 200/mt ($2/mt) to INR 38,850/mt ($468/mt) ex-Raipur in the central regional market.
$1 = INR 83.00