- Domestic steel prices witness an uptrend after an extended downturn
- Favourable export realizations a month ago supported billet sales to Southeast Asia
A southern India-based induction furnace (IF) billet producer has completed loading an 18,000-t merchant billet cargo of 100 x 100 mm Grade 3SP bound for the Philippines, with the vessel expected to sail from Chennai Port on 4 August 2026. Market participants said the deal was concluded around a month ago, when Indian billet export offers were hovering above $470/t FOB East Coast India. The cargo was reportedly booked at around $468-470/t FOB Chennai, as favourable export economics and inconsistent domestic merchant buying encouraged the producer to secure an overseas sale.
Market participants estimated freight from Chennai to the Philippines at around $15-20/t, placing the landed cost at approximately $484-490/t CFR, broadly in line with prevailing billet prices in Southeast Asia during July.
Market update
According to market sources, around 60-65% of the cargo was supplied by the exporting producer, while the remaining 35-40% was sourced from nearby billet manufacturers and merchant suppliers across southern India, a trend that is becoming increasingly common as producers pool material to execute bulk export shipments.
One nearby supplier delivered material at INR 42,500/t ($446/t) DAP Chennai Port, followed by another lot at INR 44,200/t ($463/t) DAP Chennai Port, indicating firm port-side procurement ahead of the shipment. Market participants said the exporter is not a regular billet exporter but secured the export order around a month ago, when stronger regional demand and favourable export economics made overseas sales more attractive than the subdued domestic merchant market, where buying has remained largely need-based over the past one to two months.
Why are southern producers exporting?
Market participants said the latest shipment reflects changing trade economics rather than a sharp deterioration in the domestic billet market.
Billet prices in Chennai have largely traded within the INR 41,000-43,000/t ($430-451/t) DAP range over the past three months, supported by firm domestic scrap and metallic costs with steady procurement from re-rolling mills. Infrastructure-led demand across southern India has also helped keep finished steel prices relatively firm. However, merchant buying has remained largely requirement-based, limiting opportunities for producers to place sizeable spot volumes in the domestic market.
At the same time, stronger buying interest from nearby Southeast Asian markets has improved export opportunities. Market insiders said export realisations of around $465-470/t FOB Chennai have encouraged producers to evaluate overseas sales, particularly to freight-advantaged destinations such as the Philippines, Indonesia and Thailand.
A southern India-based trader said, “Domestic demand is not weak enough to force exports, but merchant buying has been inconsistent. When export netbacks become competitive, producers prefer to move larger volumes overseas rather than wait for domestic enquiries.”
Change in India’s billet trade in May-June
Market participants said the latest cargo forms part of a broader evolution in India’s billet export market. Merchant billet exports have traditionally been undertaken by producers in western India, with shipments executed opportunistically whenever regional arbitrage became favourable.
More recently, integrated producers on India’s east coast have been exporting billets to South Asia, the Middle East and Southeast Asia through auction- and tender-based cargoes whenever export opportunities become commercially viable.
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