India’s large integrated steel mills have slashed hot rolled coil (HRC) export prices during the past week, reacting to the rapid depreciation of the local currency against the US dollar and trying to push volumes overseas.
According to market sources, the workable level for export sales from large integrated steel mills has dropped by $15/mt over the past week to $430-460/mt FOB. Official offers from Indian steelmakers have been voiced at $440-445/mt FOB at the lowest, but “the prices are volatile and many unofficial offers are floating,” one of the major producers said. Some traders have been offering at even lower levels, trying to find orders and to sell Indian HRC in short position.
The rupee has weakened beyond the INR 75 to the dollar mark, which has supported the downtrend. The sources said that during the past week the Indian rupee touched a 16-month low at INR 75.20 to the dollar, while on Monday the currency hit an all-time low of INR 76.15 to the dollar, enabling local exporters to aggressively price their HRC exports, passing on the benefits of the weak currency to buyers.
The sources said that Indıan suppliers have been ready to negotıate at $465-470/mt CFR ($445-450/mt FOB) with customers in the Gulf and some tonnages for up to 20,000 mt have been sold to this destination.
However, most buyers from key export markets have stayed away from responding to offers. Buyers in Vietnam were hearing official offers at $460/mt CFR ($440/mt FOB) from Indian mills and have been in negotiations at about $450/mt CFR ($430/mt FOB), but there has been no information about transactions. Traders have been testing the market with offers of ex-India HRC at $435-440/mt CFR, trying to sell in short position, feeling that prices will go down further. “China’s prices [from mills for SS400 HRC] are already at $440/mt FOB, so $440/mt CFR can be acceptable,” a trader from Vietnam told SteelOrbis.
Sources said that Tata Steel has decided to cut HRC production from its European steel mills in view of falling demand in the region and instead cater to its international buyers in other regions from its Indian steel plants.
