Ex-India hot rolled coil (HRC) prices have dropped sharply with sellers retreating from major markets, failing to convert offers into deals in the face of strong ex-China competition. A few deals which were labelled “compulsion sales” have been reported in the market at much lower levels, SteelOrbis has learned from trade and industry circles.
Ex-India HRC prices have dropped to the range of $605-670/mt FOB with the midpoint at $637.5/mt FOB, compared to $645-690/mt FOB late last week, with some deals already done at the lower end of the range.
But, despite the sharp reduction in price, Indian mills have largely been unable to convert offers into trades as buyers in the Middle East and Europe now have multiple sourcing choices at competitive price levels.
Several in trade circles said that they have received reports of ex-China HRC offers at $580/mt FOB submitted by Chinese mills to Asian and the Middle East buyers, with even the lower levels possible in negotiations, and hence deals have remained elusive for Indian sellers in these key markets.
Some Indian mills have had to cut prices sharply to push some volumes to the Middle East for June shipments. In total, around 10,000-15,000 mt of ex-India SAE1006 HRC have been traded at around $605-610/mt FOB, translating to around $640/mt CFR UAE. However, some sources said that the price was even $5-10/mt lower. The sales were categorized in the market as “compulsion sales” as the mills were attempting to maintain “market presence with long-term buyers in these markets.”
“Most large mills have retreated from the export markets. Only very low-priced deals are being heard by sellers only to maintain market presence, even at negative margins,” a source at a private mill said.
“Competition is extremely stiff in Europe, the recent mainstay for local exporters. Demand in this market is still positive but extremely price-sensitive. Acceptable valuations in Europe are down to $700-720/mt on CFR basis, from sales at $760-780/mt CFR late last month. Hence, Indian mills are preferring to go slow in pushing offer conversions,” the source said.