Ex-India hot rolled coil (HRC) prices have remained at elevated levels over the past week, supported by rising input costs. However, trading activity has largely stalled due to weak demand in key export destinations and ongoing geopolitical tensions in the Middle East.
More specifically, indicative offers for ex-India HRC in the Middle East are at $520-530/mt FOB, mainly the same as last week, but any optimism over the resumption of sales negotiations in Gulf Cooperation Council (GCC) countries has faded following the failure of negotiations to end the war in the region.
In the meantime, ex-India HRC offers to Europe have been reported at approximately $600-620/mt FOB, mainly the same as last week, with indicative offers standing at $680-700/mt CFR southern Europe. However, uncertainties over compliance with the provisions of the Carbon Border Adjustment Mechanism (CBAM) and required certification levels have been major roadblocks in estimating the landed prices for importers in the region.
At the same time, according to sources, several offers for ex-India HRC in Vietnam have been reported at as high as $600-610/mt CFR (around $580/mt FOB), versus the previously offered $540/mt CFR. However, most market insiders consider the new prices to be “too high to be accepted in Vietnam” given the weak demand and also the lower offer prices from other suppliers, like those from Japan.
Thus, the SteelOrbis reference price for ex-India HRC has remained at $520-620/mt FOB, the same as last week.
“There are too many volatile variables in global trade, both in terms of trading conditions and logistical and transportation options and costs. Sellers are unwilling to risk the costs associated with contract cancellations, while buyers are reluctant to commit to high-cost imports at a time when demand remains weak,” an affiliate of Tata Steel Limited told SteelOrbis.
“Most importantly, local mills have lower-than-usual export allocations for the current quarter, amid steadily tightening domestic supply. This is unlikely to change unless there is a significant improvement in demand in key markets and an easing of geopolitical tensions. For now, domestic mills have sufficient opportunities in the local market,” he added.
