The long products exports momentum is sustaining at present with Indian mills continuing to book across the spectrum. A fresh spate of 110,000 tonnes (t) of export deals were concluded which included 50,000 t of rebar, 50,000 t of billets and 10,000 t of wire rods, SteelMint learned from sources.
Last week SteelMint had reported that over 100,000 tonnes of billets cargoes had been booked while on 15 July, 50,000 t of new billets deals were sealed.
Thus, in a swift turn of events, in about 10 days, 2.4 lakh tonnes of longs export deals have been concluded.
Latest deals
- Two leading primary mills were heard to have concluded rebar cargo consignments, with a combined volume of around 50,000 tonnes, at $730-735/t CFR levels to Hong Kong. One consignment is for Aug shipment and the other for Sept.
- Sources indicated an Indian government-owned mill concluded another package of 30,000 t of steel bloom (150x150mm, 3SP/4SP grade) for Sept’21 shipment at around $605/t FoB (full advance payment basis). The same mill has concluded another deal of 20,000t bloom (200*200mm, 3SP/4SP grade) at around $600/t FoB (full advance payment basis).
- Another deal of 10,000 t of IF-route (SAE 1008) wire rods was concluded to Europe at a price of $670/t FoB for end-Aug shipments by an Indian mill.
Global factors support India’s billet exports
Two major developments are supporting long steel exports. One is the power crisis in Iran, a major billets exporter, due to which several of its billets export tenders have remained inconclusive. Power outages are impacting crude steel production. Mills have been told by the government to reduce power consumption by 10%.
Secondly, the Vietnam government has proposed a 5% tax on billets exports in a bid to control domestic prices by disincentivising overseas sales. Even though the tax has not been implemented, the proposal has fuelled positive sentiments in the market.
Mills get a breather
Notably, rebar deals had not been taking place for quite some time. However, the latest developments indicate that some interest has returned to the market, propelled by the high Chinese rebar futures contract.
That apart, sources say Indian export prices are competitive at present, spurring traders to go ahead and book cargoes. This recent trend puts the Indian steel mills in a comfortable position. “If the momentum continues, mills would be able to liquidate their inventory, which will help to take off some pressure they are experiencing in the domestic market,” said a source.
Longs exports up in Jun
India’s finished longs exports in Jun’21 were at 2.47 lakh tonnes against 1.36 lakh tonnes seen in Jun’20, a huge 82% jump y-o-y. On a m-o-m basis, Jun longs exports were up 55% against 1.59 lakh tonnes in May’21. Leading importers of longs from India are Hong Kong, Nepal and Taiwan.
Outlook
The recent spurt in export deals will help the mills to offset the price correction the market was expecting in longs. Even if a correction of INR 1,000-1,500/t, happens, it is expected that exports overall will make up for the loss in realisations, provided the momentum continues till domestic demand rebounds.
Prices as on 8:50 IST, 16 Jul. d-o-d changes indicated against closing price of 15 July
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