Ex-India cold-rolled coils (CRC) and hot dipped galvanized (HDG) prices are under big pressure from slow trading with buyers heard to be submitting low bids reacting to steady softening of prices in the overall flat product segments, SteelOrbis learned from trade and industry circles.
Ex-India CRC prices have come to $745/mt FOB in the latest deals to Europe. In particular, a few trades have been confirmed at $795/mt CFR. Most offers have slipped to $800-805/mt CFR from India as sellers try to push volumes, taking into account that demand for HDG is worse and European buyers are not interested in purchases. Two weeks ago, ex-India CRC prices were at $780-800/mt FOB, which indicated a sharp drop to reach any contracts.
Ex-India HDG prices have been going down more slowly. Offers have been at $850-900/mt FOB, down by $10-20/mt over the week. But the trading has been almost halted with bids received were at hardly above $750/mt FOB as buyers across the Middle East and Europe were anticipating further declines in line with trends seen across various flat product prices and ex-China prices dipping sharply.
Sources said that local mills are unwilling to adjust prices fast to push overseas sales as current bids were at negligible mark-up to local hot rolled coil prices and though ‘domestic demand was weak but not so bad as to price exports at a distress’.
“There are a lot of disparities across geographies. Prices are showing tentative improvements in Asia but still weak in Europe. Asian sellers are very aggressive sellers in the west,” a source from a large Indian mill said.
“Indian sellers are holding the price line anticipating recovery in Europe. Buyers in the latter region are expecting further declines. Hence a stalemate until a more definitive trend emerges. Our assessment is workable price will improve but very slowly in Europe and MENA. The valuations around $800/mt FOB will trigger renewed export trade activity,” the source said.
However, a Mumbai based trading firm maintained a more bearish outlook pointing out to a lot of ‘chatter’ over ex-China tradable level around $700/mt FOB which will be ‘unrealistic for Indian mills to compete against’.