Ex-India hot rolled coil (HRC) prices have stayed high over the past week, but export activity has been largely stalled. Mills are prioritizing better returns in the domestic market, while export allocations remain tight at the fiscal year-end. Meanwhile, the prolonged war in the Middle East and extended shipment timelines continue to delay deal closures.
More specifically, while indicative offers for ex-India HRC in the Middle East are at $520-530/mt FOB, trade activity has remained at a standstill as highly volatile freight rates and shipping disruptions have held back both buyers and sellers from high-risk contracts, sources said.
“Risks to trade are rising each day that the war in Middle East is prolonged. There is no guidance available on freight, insurance and surcharge costs at which sales contracts can be finalized. Neither buyers nor sellers are willing to assume the risks of such volatile costs,” an affiliate of Tata Steel Limited told SteelOrbis.
Besides, ex-India HRC offers to Europe have been reported at $640-650/mt CFR, the same as last week, equivalent to approximately $590-600/mt FOB. According to market sources, no firm bids have been registered so far, as many buyers remain reluctant to accept alternative shipping routes via the Cape of Good Hope due to higher and highly volatile freight costs.
At the same time, offers for ex-India HRC in Vietnam have been estimated at around $540/mt CFR level this week, up by $30/mt week on week, which translates to around $515-520/mt FOB. According to sources, a previously pending sales contract for 15,000 mt to Vietnam was concluded last week. The offer, initially quoted at $500/mt FOB, was finalized at $490/mt FOB after the seller agreed to adjust the price to partially offset higher freight costs. Besides, at least two market sources said that another sale for around 20,000 mt to Vietnam is under active negotiation at an offer price of about $510/mt FOB, though a deal is likely to be concluded only if the seller agrees to further adjust the price.
Thus, the SteelOrbis reference price for ex-India HRC has moved to $510-590/mt FOB, versus $490-590/mt FOB last week.
“The few deals reported in Southeast Asia are seen more as “positive symbolism” rather than a reflection of strong underlying demand. The region is unable to absorb the volumes being diverted due to the ongoing war. At the same time, production costs are rising sharply for all suppliers, which is being reflected in higher prices across Southeast Asia, while buyer resistance is also strengthening. As a result, the region does not represent a viable or sustainable alternative outlet for Indian exporters,” a market insider said.