Posted on 08 Jul 2022
Owing to high demand for billet in the domestic market amid scrap shortages, Indian mills have hiked their offers for overseas buyers. Billet demand in India is high, which has shifted suppliers’ focus to the domestic market over exports, Kallanish notes.
Buyers in East Africa are still seen comparing Indian offers with global offers – mainly Russian billet – and hence asking for lower bids. Moreover, a majority of African nations are facing grave recessions and dollar shortages, which has severely impacted their purchasing power. Sellers, however, are standing firm on their offers on the back of strong demand.
Indian 3SP/4SP re-rollable grade induction furnace billet initial offers surged to $635-640/tonne fob western India, equating to $725-730/t cfr Kenya and Tanzania. A few of them are heard hesitant to offer anything even at below $650/t fob India. Bids on the other hand, are heard at $630-640/t cfr Kenya and Tanzania. These are however unacceptable to sellers. No export deals were heard concluding for billet this week.
“Since late June, there is a shortage of billets in India,” says a mill source. “It all started with the Mandi [region] market and the sellers, even exporters, started selling billets to Mandi by leaving their respective markets … This move by the sellers caused a shortage of billets in their market and demand for billets started rising in the whole nation. In this scenario, no seller is interested to export billet at a low price.”
"The demand in Africa is also low due to elections and the Hajj pilgrimage season," says another source. "After the [outbreak of the Ukraine] war, the conditions in Africa have become worse; we are hearing that there is an acute shortage of basic necessities and banks are low in USD to process and honour LCs. A majority of Indian mills have no bookings for August rolling from Africa."
Billet offers in India’s domestic market are at $666/t ex-Mandi, whereas billet offers in Raipur and Gujarat are hovering at $629/t ex-Raipur and $636/t ex-Ahmedabad. Ingot – small-sized, semi-finished – prices are noted at $625/t ex-Bhavnagar and $638/t ex-Mumbai.
Indian blast furnace-grade billet price expectations are still high, owing to which primary mills are not receiving any enquiries from the Southeast Asia region. No offers were heard for this week.
Source:Kallanish
