Indian billet prices fell down sharply by INR 500-1,000/MT W-o-W and upto INR 2,000/MT M-o-M. Prices have been corrected on backdrop of weak sentiments in global market. Current offers for 100*100 mm commercial quality billet are assessed at INR 24,700/MT (ex-Mumbai) and INR 23,400/MT (ex-Raipur).
Lower Export Offers from Chinese Mills
One of the prime reason for falling steel prices in global market is lower export offers from Chinese mills. Overproduction, cheaper iron ore and subdued demand in Chinese domestic market are forcing mills to look for export market.
Chinese export increased significantly by 50% Y-o-Y to touch 93 MnT in 2014. Looking at rising export from China, some countries have imposed anti dumping duty on Chinese steel and some have started investigation.
Also, Chinese exporters are more aggressive to those countries, which have either lower rate of duty or no anti dumping duty.
Indian Exporters Competitive in Global Market
It is tough for Indian exporters to match Chinese prices in global market. Indian mills prefer to sell in domestic market at a lower rate.
Recently, Vizag Steel’s bloom tender was settled at USD 330-335/MT, FoB East Coast India (down USD 40/MT from last tender) in order to match Chinese offers.
Oversupply from Chinese suppliers will continue to hurt global steel market until Chinese mills opt for production cut or Indian government imposes some kind of anti dumping or safe guard duty on steel import.
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