Indian hot rolled coil (HRC) exporters have faced limited demand in the international market this week due to the holiday slowdown in the Gulf, limited buying in Europe, and still strong competition in the Vietnamese market. Prices have been corrected down by a further slight margin, although the mood among producers has improved on the possibility of a withdrawal of the export levy by the government, SteelOrbis has learned from trade and industry circles.
Ex-India HRC prices have come down to $625-640/mt FOB, compared to $630-650/mt FOB a week ago, but deals were scarce as demand for alloyed HRC in key markets has fallen significantly since buyers are not seeking volumes now.
The price of $625/mt FOB from India corresponds to an offer to Vietnam, which has been reported at $660/mt CFR at the lowest this week, down by $5/mt from the previous week. According to the sources, one small volume has been sold at this level, but this has not been confirmed by the time of publication and most sources said that deals with Indian suppliers are hardly possible at the moment with Formosa announcing its new price at $655/mt CFR and China continuing to cut offers.
Trades in the UAE, which were ensuring higher realizations until recently, have dried up on a combination of low demand and holidays over the past week. The indicative price level from India has been assessed at $680-700/mt CFR.
“We are getting positive signals from government officials that the 15 percent export tax may be withdrawn with matching hikes in the export tax on iron ore. This can act as a strong positive in reducing production costs and reviving overseas sales at a more competitive price. Also, new EU buying from September can throw up sales opportunities,” an official at a private mill said.
“Demand for alloyed HRC, though exempted from export tax, is not sustainable. It is clear that the number of buyers responding to bids for boron HRC is sharply down. The global price decline looks to be running its course and leading global producers are attempting to push up prices with different outcomes as of present,” he said.