The Indian domestic billet prices bounced back on Monday owing to improved export demand.
Prices have increased by around INR 200-400/MT (USD 3-6) at major markets (specially coast based).
Current domestic prices for induction grade billet of size 100*100mm stands at INR 30,400-30,500/MT (USD 467-470) Ex-Mumbai & excluding 18% GST. Meanwhile, the export offers for same grade are hovering at USD 485-495/MT FoB India. This shows that export realization remain healthy as compared to domestic trades.
Market attributes this hike to improved demand from overseas markets, especially from SE Asia and lack of availability of spot cargoes. Market expects prices may increase further in coming weeks.
“There is limited availbility of spot cargoes in the seaborne market. China is virtually out for quite some time, CIS based mills have made decent bookings in last few weeks and are booked till Jan. There are limited allocation from Indian mills as domestic prices are better than international.” said a trader based in Singapore.
Another major factor pushing billet prices is fresh contracts of graphite electrode to be signed in early 2018 by electric arc furnaces.
Steelmint learned that graphite suppliers are not willing to do a long term contract (typically 1 year), rather they want a quarterly or monthly pricing mechanism. Market expects the real impact on cost of production will be seen in Jan 2018, when fresh contracts are signed.
Notably, last year’s contact prices were at around USD 4,000-6,000/MT.
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