Chinese steel futures continued to fall on Wednesday on the news that government is concerned about rising prices which could lead to high inflation. Steel and raw material futures corrected by upto RMB 300 ($47) yesterday. While physical prices have not corrected in the same proportion, they are soon expected to follow suit. In today’s morning trading session, iron ore futures have fallen by 7% and that of rebar and HRC have come down by around 6.5%.
Indian exports have also been affected by falling steel futures as well as due to lower availability of vessels for China. In a recent export deal of 30,000 t BF grade billets, concluded at $655-660/t FoB India, prices dropped by over $45/t w-o-w.
Imported billet prices which were seen at $700-710/t CFR China day before yesterday, were heard to be at $680-690/t CFR China yesterday.
Indian exporters are now worried about tight vessel availability. There is news that Indian vessels are not being allowed to berth at Chinese ports and freight rates are being reported to be anywhere between $50-70. Some traders have also said that the freight rates for break bulk cargo could even go as high as $80-90/t. Notwithstanding that, Indian mills are likely to continue looking for export options as domestic demand remains subdued because of ongoing lockdown. Exports are expected to cross over two mn t in May.
SteelMint’s daily billet index dropped by INR 700/t to trade at INR 42,100/t exw Raipur.
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