Ex-India cold rolled coil (CRC) have continued to decrease in new contracts singed in Europe this week. However, ex-India hot dip galvanized (HDG) coil prices have been maintained over the past week amid silent trade conditions, but unconfirmed reports of at least two local mills commencing negotiations on long-term supply contracts for the July-September quarter improved sentiments as regards the outlook.
More specifically, ex-India CRC prices have come to $710/mt FOB in the latest deals to Europe, down by $5-15/mt over the past week. In particular, a few deals have been confirmed at €710/mt CFR, which translates to $765/mt CFR. New offers, however, have been heard in southern Europe at $760/mt CFR, as sellers try to increase sales given slow demand for HDG in the region.
Meanwhile, ex-India HDG prices have been maintained at $790-850/mt FOB, but no deals were concluded as the bids received were not acceptable for sellers. However, several market participants said that they had heard that one Odisha-based mill and another western Indian integrated mill had commenced long-term supply agreements for the second quarter, triggering some optimism among sellers. Though unconfirmed, they said that the buyers included a leading Europe-based metals and mineral trading firm and another London-based metals e-trading platform, with negotiations for an estimated aggregate tonnage of 35,000-45,000 mt.
While no information or indications are available on the price band of the supply talks, market circles said that “normally such long-term supplies were based on hard bargaining and discounts to the average trade price of the previous quarter.”
“Long-term supply contracts normally do not have a direct impact on the spot trade price. But it is still a positive indication from the demand side. It is a sentimental boost to sellers and expectations of a spill-over effect if demand in key destinations improves,” an official at a private mill, not involved in the deals, said.
“Indirectly, the supply contract will ensure some drawdown of overall export allocations of mills. This can support producers in attempting to push up spot sales prices, subject to a demand revival,” he said.