Indian exporters of hot rolled coils (HRC) have had to cut prices further even despite hopes that markets may be near a bottom. Given the continued weakness in the Asian region and tough competition with Chinese HRC suppliers, some Indian sellers have agreed to lower prices with buyers demanding that the benefit of the weak local currency be factored into the selling price, SteelOrbis has learned from trade and industry circles.
The ex-India HRC price range has come to $575-630/mt FOB, lower by $30/mt on average from last week’s level of $625-640/mt FOB.
Official ex-India HRC have maintained offers to a number of destinations at $620-640/mt FOB for alloyed HRC, exempted from export tax, but buyers were seeking the benefit of the local currency depreciating to almost INR 79.90 to the US dollar. So at least a few negotiations were reported at $600-610/mt FOB and even down to $575-580/mt FOB for Asian sales destinations.
“The positive is that the perception in most markets, in Asia and the EU, is that a bottom is near. The negative is that prices are not rebounding and that there is deep weakness in Asian regions, with buyers unwilling to accept any tiny increase,” an official at an eastern India-based mill said.
“Even limited-volume deals can only be concluded after acceding to buyers’ demand for discounts to match the depreciation of the rupee as the realizations of sellers are in US dollars and the rupee exchange rate is at a historical low,” he said.
Trade circles said that mills are tending to hold ex-India prices stable more in the hope that the EU market has bottomed out. An offer to Europe has been heard at around $730-740/mt CFR, translating to $630-640/mt FOB.
Sources said that an eastern Indian mill was in negotiations to Asia at $600-610/mt FOB for September shipment. But an even lower price level of $610-620/mt CFR Vietnam (or $575-585/mt FOB) has been available from Indian sellers after a sharp fall from China since late last week. Traders have been more flexible and offered ex-India HRC at $580-610/mt CFR Vietnam, trying to attract buyers, though a number of mills have not been active in offering below $600/mt FOB, seeing a very poor response from customers. Bids from Vietnamese customers for boron-added SAE1006 HRC have fallen further to $545-560/mt CFR, SteelOrbis has learned.
Offers for ex-India HRC have also slipped in the GCC market, where mills have been asking for $670-685/mt CFR mainly, down from mainly $700/mt CFR a week before.
Indian HRC offers to Turkey have been reported at $650/mt CFR recently, down by $20/mt from that heard in early July. The competition with Chinese HRC exporters has been seen not only in Asia, but in the Middle East too, which has put great pressure on Indian prices.