Ex-India hot rolled coil (HRC) prices have declined after cuts in domestic base prices, but the prices have still been insufficient to drive sales amid the worsening mood in destination markets, prompting most large mills to not submit offers. Besides, the competition with other Asian HRC suppliers is extremely tight globally.
Sources said that ex-India HRC prices have settled at $540-560/mt FOB, against $550-565/mt FOB last week, but, with the recovery of finished steel prices proving to be short-lived, most overseas buyers have alternative cheaper options from China to meet the low level of demand.
Furthermore, conditions in Europe have continued to remain in the doldrums amid a combination of low business activity after the holidays and uncertainties surrounding antidumping measures and outcomes still not clear. Offers for ex-India HRC in southern Europe have been voiced at $620/mt CFR and slightly lower, which translates to around $560/mt FOB.
“The drop in ex-India prices is a routine exercise after the reduction in domestic base prices. Most mills have negligible export allocations as deals overseas are not working out and the outlook is unlikely to change in the medium term,” a source at Tata Steel Limited told SteelOrbis.
“We are seeing some volumes flowing out of China at very low prices. This will increase as the domestic market in China is suffering from a glut and weak demand. These excess supplies will keep Indian mills out of exports for the next several months, barring stray deeply discounted sales by some mills facing inventory challenges,” another source said.
