Indian billet export market remains muted in absence of offers

After booking over 100,000 t billets, the Indian billet export market reported silent this week. Although, for this week, we witnessed limited export offerings from the Indian mills amid better price realizations in the domestic market.

SteelMint assessed export prices for 150*150mm, BF route billets from India to be at $418-421/t.

According to SteelMint Analysis, even though the Indian mills are getting better price values in the domestic market than export, but due to increasing raw material and scrap prices amid supply shortage, the mills are experiencing low-profit margins. This event is likely to pull up the Indian billet prices further in the domestic as well as the export market.

Yesterday, SteelMint’s billet (induction grade) index stood at INR 32,600/t ($437/t) exw Raipur, up by INR 1000 ($13) against last week.

On the other hand, due to the sluggish demand, the buyers are not bidding in the range of offers. The bids from China for Indian billets have seen at $435-440/t CFR, while the offerings were at $445-450/t CFR levels.

Hike in freight rates: The other parameter which contributed to the high-bid offer disparity is rising freights. For instance, the freight from India to China has increased to over $25/t from $20-22/t. The main reason behind this cited is container shortage, due to which shipping lines have raised freight.

Mills cut export allocations further: Indian mills have further lowered allocations for exports considering the hike in domestic prices. For instance, Jindal Steel & Power is planning to cut down its steel exports to 20% share of total sales, officials quoted in a recently conducted investor conference call. During the lockdown, the company was exporting a 70-72% share of total sales. Company officials also highlighted that they will primarily export finished steel instead of semis.

Outlook: Indian billet export shipments are likely to fall in the near future as seasonal domestic construction activity is expected to fetch strong demand. Clues can bet witnessed by JSPL’s recent announcement on export cut down.