Indian billet export market muted in absence of firm offers

This week, Indian billet export prices continued to remain stable. The trade activities remained silent on the primary mills' side in the absence of firm offers. A state-owned primary mill's tender, floated for 240,000 t billets expired yesterday. SteelMint could not confirm the outcome of the tender until the publishing time of this report.

SteelMint's bi-weekly assessment for India billets (150*150, BF route, FoB East coast) is $600-605/t, unchanged against last week.

During our conversation with an international trader, we learned that a few private primary mills are enjoying supernormal margins in finished long products instead of semi-finished products like billets. For instance, a leading private primary mill was heard having sold a sizeable rebar lot in Hong Kong at $685-690/t, CFR. These mills are likely to offer billets actively by June '21 as the construction activities will slow down in domestic market, said another international trader.

Chinese mills increase bids on rising futures - Meanwhile, Chinese bids for Indian billets witnessed an increase amid rising SHFE futures. According to the data maintained with SteelMint, the SHFE Oct. contract rose by RMB 200/t ($31) w-o-w and yesterday closed at RMB 5411/t. Owing to this, the Chinese bids for Indian billets are now ranging in $650-660/t, CFR.

Secondary mills turn active for billet exports - On the other hand, on sluggish domestic demand amid increased lockdown restrictions, a lot of export activities have been seen on the secondary mills' side. At the end of the last week, a few Gujarat-based mills sold around 15,000 t to Africa at a price level of above $585/t, FoB. This week price indications of IF route billets is around $585-590/t FoB for SE Asia for June'21 shipments.

Outlook: Amid the second COVID wave, the domestic demand in India is becoming sluggish. Hence, mills have started routing their domestic allocations for the export market and we may see increasing export shipments in the near future. However, diversion of liquid oxygen for medical use has been impacting the production of the induction mills.