Billet Offers from Russia fall further on Weak Currency

Falling Russian Ruble has made local steel producers in the country to reduce offers by USD 5/MT this week. Current offers are prevailing at around USD 390/MT FoB Black Sea.

The Russian currency, Ruble is amongst the worst performing currency which has depreciated about 50% of its value this year, hit by low oil prices and western sanctions against Russia over its role in Ukraine’s crisis.

Ruble, which was trading at 37 per USD in September, has significantly fallen to 56 per USD in December, at the time when crude oil prices have slipped from USD 94 to USD 66 per barrel. Similarly, Ukrainian currency has also depreciated significantly owing to falling crude oil prices.

Russia & Ukraine are one of the largest exporters of Billet in the world. Industry experts believe that falling Billet offers from CIS countries will put pressure on Billet prices across the world.

Indian Billet Export Offers find some Takers

Indian Billet at current levels has been able to invite very low buying interest from Bangladesh and other South East Asian countries owing to attractive (cheaper) offers from Chinese & CIS producers.

Recent tender of 80,000 MT (10,000 MT Billet and 70,000 MT Bloom) floated by RINL could only sold 15,000 MT (5,000 MT Billet and 10,000 MT Bloom) at USD 436/MT and USD 419/MT FoB Vizag, respectively.

With offers falling further from CIS nations, Indian manufactures will find it tough to compete with them.

Current offers of MS Billet

Source: SteelMint Research

Indian Domestic Billet Prices move up

Domestic Billet prices, which were quiet for some time, have noticed an uptick of INR 400-600/MT this week. Manufacturers have raised offers owing to anticipated hike in power tariff in states like Maharashtra & Tamil Nadu and rising imported Scrap offers. Also, Indian Rupee, which touched 9-month low against the USD, induced Indian Billet makers to hold their offers.