Ex-India hot rolled coil (HRC) prices have remained largely stable over the past week, with trade activity subdued as buyers have remained cautious, holding back in anticipation of further declines, while sellers have resisted concluding deals at discounted levels.
Sources said that ex-India HRC offers have been submitted in the range of $505-510/mt FOB in the Middle East, unchanged from last week, and higher in the range of $545-550/mt FOB in Europe.
According to the sources, while some local mills have received inquiries from the Middle East, these have failed to be converted into deals owing to bid-offer disparities. It was learned that most of the bids received were below the $500/mt FOB mark in the range of $490-495/mt FOB, but sellers were unwilling to conclude deals below the $510/mt FOB mark.
A western India-based large mill has reported a sale of 15,000 mt to its affiliate rolling mill in western Europe, but the price was not officially disclosed due to a “confidentiality clause for a transaction with a related party”, while market sources indicated that the price was around $530/mt FOB.
“There is better buying interest seen in the Middle East, but price negotiations are not working out between buyers and sellers. Buyers are cautious on pricing and will sign a contract only on the lower side. But sellers - large Indian mills - are pulling back from discounting as the domestic price and demand scenario is much more promising. Also, export allocations are on the lower side, pre-empting the need to push volumes overseas,” an official at Jindal Steel Limited told SteelOrbis.
“It is difficult to bridge the bid-offer gap in present market conditions where domestic market is looking good, but prices are not holding up either in the Middle East or Europe. In Europe, flat product prices would need to consolidate further if distributors are to look more at imports, but weak demand and higher local supplies are likely to limit any significant uptrend. Indian mills will need to increase competitiveness, that is offer discounts, if offers are to be converted to sales,” he added.