Posted on 26 Sep 2022
Sluggish demand for long steel has brought down the price of billet, but Indian billet is still seen as the costliest among all other origins in global trade. Aware of the large gap between offers and bids in export markets, Indian sellers are seen satisfied focusing only on domestic sales for the moment.
This week, Indian 3SP/4SP re-rollable grade induction furnace billet indications plummeted by $25-30/tonne on-week to $600-605/t fob western India, equating to $670-675/t cfr Kenya and Tanzania.
East African buyers, however, are heard bidding at a drastically lower $550-555/t cfr Tanzania and Uganda. Owing to prevailing political unrest in Kenya, overall sentiment in East Africa is down as it is the largest importer in the region, sources tell Kallanish.
“The whole sentiment in East Africa is dependent on Kenya,” says a trading source. “Unless and until sentiment improves in Kenya, we won’t find export viability from India to East Africa.”
“Sentiment in East Africa can be measured by the imported rebar offers they are receiving from Chinese mills. China-origin B-500 grade rebar is offered at $670/t cfr East Africa and wire rod is also hovering at the same level,” the trading source adds.
In the Indian domestic market, demand for finished longs is noted as stable. “We are able to sell all the billets in the domestic market, for now,” a mill source says. “We have not cut production. There is a coal shortage in India and the cost of making direct reduced iron has increased; this has created a surge in demand for billet made by melting scrap.”
The fall in billet prices can also be attributed to a drop in imported scrap offers, as the majority of induction furnaces in Gujarat are dependent on scrap for billet production.
Billet offers in India’s domestic market plunged to $613.64/t ex-Mandi, whereas billet offers in Raipur and Ahmedabad are hovering at $585.23/t and $606.25/t, respectively. Ingot – small-sized, semifinished – prices are noted at $616/t ex-Mandi and $597.46/t ex-Ahmedabad.
Source:Kallanish
