In India, the steel market has again been quiet this week, as in past weeks. As we mentioned in our previous analyses, the failure of end-user demand to reach desired levels is the main reason for this situation. Thus, local producers have not announced the upward price adjustments which the market had been anticipating. The Indian flat steel market is currently following a fluctuating trend. Various price levels are heard from different regions and workable offer levels stand in a wide range. One producer is offering hot rolled coil (HRC) at the base price level of INR 29,000/mt, whereas another producer is offering the same product at INR 30,000/mt and another is offering at INR 31,000/mt. At present, the galvanized product market is the most active of the flat steel product markets in India. Currently, the price level of local production hot dip galvanized (HDG) coils of 0.6 mm thickness in the Indian domestic market is at INR 37,500-38,000/mt ex-warehouse. Buying activity for this product is faster than for hot rolled coils.
On the import side, some offers are heard from Chinese mills and traders. Chinese export offers to India, which entered a rapid increasing trend two weeks ago, are now softening. Ex-China hot rolled coil offers, which were standing at $610-620/mt FOB last week, have declined to the level of $589-590/mt as of early this week. It is also possible to hear even lower levels. Indian buyers do not hold a positive view of offers given from China for the time being, because it is possible to find Chinese origin products at lower levels in the spot market. Given that local spot market prices of HRC may be lower than the Chinese offers when all taxes are taken into account, it reasonable for buyers to prefer to buy from the spot market. Chinese origin cold rolled coil (CRC) import offers to India have maintained their levels. Offers via traders for cold rolled coil of 1 mm thickness are heard to be standing at the level of $720-725/mt FOB. The CRC market in India is more active than the local HRC market. In particular, the sustained dynamism of the automotive sector has boosted demand for cold rolled and galvanized sheets.
Looking at exports, traders' offers to the European markets for Indian origin hot rolled coils (HRC) are standing at the base price level of €530-545/mt CFR Antwerp for late September shipment; however, buyers in Europe do not hold a positive view of these offers. Since the buyers' price idea stands at the level of €515-525/mt ($656-669/mt), only a few transactions have been concluded. There have been some hot rolled coil and galvanized coil transactions from India to the Middle East. However, SteelOrbis has heard from market players that Indian mills and traders may enter the European markets with competitive offers, with the influence of the holiday season now gradually waning in Europe where the market is expected to gain more momentum in the coming days.
Generally speaking, it may be said that local Indian flat steel market demand has seen some recovery despite the fact that it has not reached desired levels. This may give some hope for the future. As we mentioned in previous analyses, high inventory levels have put pressure on the markets and, given the lack of a full recovery of demand, the markets have continued their quiet, stable trend. Market supply is increased further by the materials released to the markets by the mills every day. The general idea in markets players' minds is to turn towards the export markets. The number of offers given to the European markets, which is expected to start making purchases after the holidays, is thought likely to rise. Export offer levels, the balance between supply and demand in the local market, and the influence of the iron ore and scrap markets on production costs will be main factors which will determine the future trend of the Indian flat steel market. Taking all factors into account, the general opinion in the market is that the Indian flat steel market, like the global steel market, may start climbing up in the coming weeks.