While ex-India hot dipped galvanized (HDG) coil prices have been adjusted downwards given prevalent discounted sales this week amid modest trading conditions, ex-India cold rolled coil (CRC) prices have slightly increased as some optimism has been reserved amid better sentiments in Europe.
Specifically, ex-India CRC prices have increased by around $10/mt week on week, reaching $710-720/mt FOB in the latest offers to southern Europe. In particular, ex-India CRC have been voiced at €680-690/mt CFR, which translates to around $760-770/mt CFR southern Europe, versus $750-760/mt CFR last week.
Ex-India HRC price was officially quoted in the range of $770-820/mt FOB, down by $10-30/mt week on week given slow demand overseas, while deals for ex-India HDG have continued to be reported with additional discounts, or at around $735-745/mt FOB, same as last week.
According to the sources, the ‘official drop in price’ was only notional because ‘mills were just adjusting the discounts into the pricing as a new normal,’ as price at higher end of the range had become ‘irrelevant’ amid widespread discounting. Besides, they added that since most of the low volume trade continued to be successful only at discounts, sellers had no option but to adjust official offers accordingly.
Though trading conditions remained on the lower side, demand in the Gulf region and Europe was there but buyers are ‘extremely price sensitive’ and price improvement outlook on part of sellers very limited. More specifically, a western India based mill, reported a deal for 12,000 mt with a Europe based trading arm of its affiliate for Rotterdam delivery at $743/mt FOB. However, according to sources, this price on FOB basis is “so low because it does not include 25% duty”, which means real deal price is at €820/mt CFR level minimum, standing in line with other suppliers’ offers in Europe. “India is so dangerous due to the small quota they have for galvanized steel. When quota is exhausted, duty is 25%, but it also depends on the quantity, so in some cases you may pay only around 16% or so,” a Spanish trader told SteelOrbis.
Besides, an eastern India based mill reported a deal for 15,000 mt for Qatar delivery at $737/mt FOB, and a second modest volume of 5,000 mt for Nigeria delivery at $730/mt FOB, the sources said.
“Most key markets remain bearish in terms of volumes and price of trades. From sellers point of view only discounted sales are working. But with mills in China and Europe attempting to increase price is a green-shoot. The question is whether the market will absorb the imminent price increase,” a sources in ArcelorMittal Nippon steel said.