Indian steel mills have continued to slash ex-India hot rolled coil (HRC) prices in reaction to declining local prices and rising inventories, but have failed to push large volumes overseas amid a combination of year-end considerations and buyers preferring local sources, SteelOrbis has learned from trade and industry circles.
Ex-India HRC prices have dropped to $710-740/mt FOB, down by $20/mt from $730-760/mt FOB a week ago. Government mills have been out of the export market as they lacked flexibility in pushing deep-discounted sales, the sources said.
At the same time, while private mills have been able to conclude stray deals, they have been refraining from high-volume sales as buyers in key markets have generally been asking for lower and lower prices and have been opting to wait.
“Indian exports are steadily declining, down 29 percent in November month on month, and December will see a sharper fall, as mills are holding back deals at deep discounts. Exports have become a direct factor in inventory levels and not economic viability. Mills are confirming low-volume bids at low realizations based only on their inventory management strategy,” a source at ArcelorMittal Nippon Steel Limited (AMNS) said.
“Current ex-India prices roughly translate to levels last seen in March 2021 and before the surge in input costs that came around June and July. Hence, pushing higher volumes at deep discounts is unviable. On the demand side, it has completely dried up in key markets like Vietnam where buyers are preferring local sources,” they said.
The lowest price for ex-India HRC was reported in a deal for 20,000 mt of SAE1006 HRC from one of the large private mills at $755/mt CFR Vietnam, which translates to around $710/mt FOB. Market participants said that such low prices indicate the acute inventory pressures faced by the seller and the low buying interest in this sales destination.
According to market intermediaries, an eastern India-based mill reported a trade for around 10,000 mt or slightly less at $720/mt FOB for February shipment with an Asian buyer.
The higher end of the reference price range ($730-740/mt FOB) corresponds to the floor price level for some mills, which are not very aggressive and the latest tradable value in other outlets rather than Asia. For instance, to the Middle East, there have been no new deals after a sale to the UAE at $780/mt CFR.
To Turkey, the last deal for Indian HRC was at $800/mt CFR, but this week some sources report the possibility of getting $780-790/mt CFR.