Ex-India hot rolled coil (HRC) have continued to drop as sellers have attempted to push overseas sales, facing rising competition in all major outlets, and buyers in the Middle East and Europe have been seeking deals only at deep discounts, anticipating that the bearish market conditions will worsen.
The SteelOrbis reference price for ex-India SAE1006 2mm HRC has come to $575-620/mt FOB, down by $22/mt on average compared to $590-650/mt FOB a week ago. The lower end of the range corresponds to offers and some small sales to the MENA region, while the higher end reflects offers to Europe, which have been corrected more visibly over the past week.
Though some Indian sellers have been ready to offer to the Middle East at around $620-630/mt CFR and $670-680/mt CFR for buyers in Europe, such prices have been unworkable for all domestic exporting mills, leading to a fall in the rate of conversion of offers to deals.
Among the limited trades confirmed in the market was a deal for 12,000 mt for delivery to the UAE by an eastern India-based mill at $588/mt FOB, which translates to up to $625/mt CFR, versus the previous booking at $630/mt CFR at this destination.
The same mill is also heard to have concluded a trade for 8,000 mt for Qatar at a low price of $575/mt FOB, but it was not confirmed by the seller or buyer.
Offers from India to Turkey have been reported at $600-610/mt CFR, as some sellers have been trying to accelerate sales, without success so far.
Some offers for ex-India coils to Europe have been confirmed at $670/mt CFR, down by $30/mt over the past week, but, since there have been still lower quotations for other Asian origins, like Japan, there have been no reports about new deals.
“Current achievable export prices are at a discount to local sales prices and are unviable for most integrated mills. We understand that most of the actual stray confirmed deals are by sellers attempting to maintain a market presence with long-term customers,” an official at a private mill said.
“We hear very aggressive ex-China offers at $540-560/mt FOB in the Middle East. It is extremely challenging for Indian sellers to enter export sales in the current conditions. Buyers in Europe are active but only for deep-discount offers. Indian mills will remain active to exhaust export allocations already made for the remaining month of the current quarter and will then make a fresh assessment,” he said.