Ex-India hot rolled coil (HRC) prices have been reported at a six-month high with local mills successful in concluding some deals at higher levels, while the return of buyers from the EU region to the market after the holidays was also a positive sign, SteelOrbis has learned from trade and industry circles.
Ex-India SAE1006 2mm HRC reference prices have reached $630-670/mt FOB, up from $620-630/mt FOB a week ago. The lower end of the range ($630-645/mt FOB) corresponds to some deals done over the past week, while the higher end of the range represents the tradable level for ex-India coils to Europe, which is the highest-priced market nowadays. A few Indian mills have submitted their latest offers starting from $660/mt FOB to most sales destinations, but whether these were converted into deals could not be confirmed, but they reflect the bullish sentiments on overseas sales.
According to the sources, deals at the higher price levels were successful or possible mainly in the Gulf and in the EU, while the achievable price for sellers in Asia were mostly “more conservative”.
Citing an example, the sources said that an eastern India-based mill reported a trade for 15,000 mt for end-of-February shipment to Bahrain at $645/mt FOB. Some deals to traders have been rumored at $625-632/mt FOB, without confirmation or details about the destination.
Rare offers from Indian suppliers to Vietnam have been at $660/mt CFR on average, so around $640/mt CFR for Chinese or domestic origin coils has been more competitive.
Offers from India to the UAE have reached $690-705/mt CFR recently, translating to $655-665/mt FOB. The previous tradable level to this country was not above $660/mt CFR last week.
Also, one Indian mill has been asking for $675-685/mt CFR, or $645/mt FOB on average, while other producers have been all higher, at $690-700/mt CFR.
After increasing targeted levels in Europe to $670-680/mt FOB last week (up to $730/mt CFR southern Europe), by now most market sources believe that $670/mt FOB has already been fairly achievable even though there have not yet been any details of deals done.
“Most mills have completed higher export allocations for the last quarter riding on the success of deals concluded now at a six-month high. The bullish sentiment has been boosted by the return of buyers from the EU. Though stock replenishment by buyers from the EU is cautious, the resumption of trades from the market will support export realizations to gain strength going forward,” an official at an Indian mill said.
A steel sector analyst with a Mumbai-based financial advisory firm said, “The global supply chain is changing rapidly and moving into a strong bullish zone. Post-New Year holiday, business in the EU is showing a positive trend. Indian mills have increased export allocations, reducing their local sales volume target. Conditions are rife for the ex-India price target to touch $700/mt FOB.”
