Over the past week, Indian integrated steel mills have continued to aggressively push up hot rolled coil (HRC) export prices, increasing them by $10-15/mt to the range of $480-495/mt FOB. Moreover, new offers from some suppliers have already reached $500/mt FOB, but trading activity slowed down significantly as buyers generally did not consider higher prices acceptable and anticipated a correction in prices, preferring to stay on the sidelines.
The traders said that enquiries for ex-India HRC have almost dried up during the past week particularly among Asian buyers, preferring to either await a price correction.
It was pointed out that with local HRC prices having gained ground for seven consecutive week, integrated steel mills’ realizations from domestic sales have improved significantly and much higher than export sales realization and therefore easing compulsions of aggressively pushing volumes overseas.
The highest priced contract for around 25,000-26,000 mt of Indian coils has been done to the UAE over the past week – at $525-527/mt CFR, which translates to around $495/mt FOB or just slightly above.
At the same time, in Asia bid prices from end users have not exceeded $505/mt CFR for Indian HRC. In Vietnam, the latest booking has been at this level (corresponds to around $480/mt FOB), as SteelOrbis reported earlier, but overall demand has weakened over the past week. Offers from India to Vietnam are at $510-530/mt CFR from different suppliers, which is $485-505/mt on FOB basis, but customers have focused on domestic purchases.
Sources said that an eastern India based steel mill concluded a modest volume trade for 8,000 mt at price reported in the market around $480/mt FOB for October. Similarly, another eastern steel mill with plant in Odisha conclude an October supply contract for 12,000 mt at around $485/mt FOB, the sources said. Both deals have been for Asian traders, SteelOrbis learned.
“Chinese HRC export prices are rising, but its local prices are weakening. Hence, Chinese buying of imports is taking a pause and there is no acceptance to higher ex-India HRC prices,” an official at Indian mill told SteelOrbis.
“Considering rising demand of HRC in the local market in India, most integrated steel mills are re-strategizing exports with greater focus on shipping out semis rather than finished flat products. Per ton realizations are better in case of overseas sales of semis compared to per ton export realizations from HRC and hence the re-focusing of export portfolio,” he added.
