Ex-India hot rolled coil (HRC) prices came under fresh downward pressures of weakening SE Asian market situation, challenging logistics to the Middle East and limited quota in Europe, SteelOrbis learned from trade and industry circles on Tuesday.
Ex-India HRC offers were quoted lower in the range of $473-565/mt FOB, compared to $480-575/mt FOB a week earlier, but barring small volume stray deals trade activity remained at a very low ebb.
According to the sources, among the very few deals confirmed over the past week, a sale for 8,000 mt for Vietnam delivery was concluded at $473/mt FOB, almost $10/mt lower than similar deal in earlier week. This translates to $503-505/mt CFR. But a deal was rather exception than a common price available from Indian mills. “This price is right for Vietnam, but I see this from traders offering in short. Maybe Tata can give this level [on FOB], but mainly mills try to avoid to go much lower,” an Indian source said.
At least two mills were heard to have submitted offers at around $565/mt FOB in Europe, also about $10/mt lower than earlier week. But deals were not yet confirmed with trade circles claiming dwindling available quota and competitive challenges standing in way of deal conclusion. Also, on CFR basis prices didn't change much with increasing freight costs.
There is significant trade diversion by Indian mills away from Europe for quota restrictions and Middle East because of logistical challenges. In Southeast Asia it is seeing more volumes being put on offer, but prices in destinations like Vietnam are moving down, and offers at $500/mt FOB are not being considered seriously by buyers, an official with a large private mill said.
Some mills were also considering $515-520/mt FOB as tradable in the GCC, but again this level is standing nominal with very few shipowners ready to agree to take a cargo and freight rates are increasing too fast.
