Close on the heels of the hike in local hot rolled coil (HRC) base prices to levels of $643-650/mt ex-works and higher premiums for domestic sales, Indian integrated steel mills have aggressively increased their export prices beyond the $600/mt FOB level and are even submitting offers of $700/mt FOB, while keeping export allocations low and shifting their focus to the European Union (EU) market, SteelOrbis has learned on Monday, December 7.
Traders and industry sources said that ex-India HRC export prices have been increased to $660-670/mt FOB with offers as high as $720/mt FOB also heard in the market. This means prices have surged by $70/mt compared to the levels of $590-600/mt FOB in the previous week.
Most of the deals reported during the past week were with EU-based buyers, where exports have been fetching higher realizations compared to traditional markets in Southeast Asia. Though buyers from Vietnam are still active in the local market and accepting higher prices, their acceptable valuations remain lower than in the EU and hence Indian integrated steel mills’ trades to Europe saw a sharp rise over the past week.
“Reports available here indicate shortages building up in the EU market and large producers based in the European Union, including ArcelorMittal, are increasing prices aggressively, opening up higher inquiries and bids received by Indian integrated steel mills,” an official from an Indian producer said. “Indian exporters are more interested in deals with EU buyers at the moment. But limits on increasing exposure in overseas markets are very strong for Indian steel mills and exports allocations being kept at very low levels for the last quarter of the current fiscal year at least, in view of short supplies in meeting local demand,” he added.
“At the same time, with local prices at around $650/mt FOB plus premiums in select regional markets, exporters are not willing to commit limited export allocations unless the spreads are at least $15-20/mt above local merchant sales,” he said.
Market sources said that an Odisha-based integrated steel mill concluded a trade for an estimated tonnage of 15,000 mt at $640-645/mt FOB to Europe early last week and then a smaller tonnage was traded at $665-670/mt FOB to an Antwerp-based buyer.
A western India-based integrated steel mill was rumored to have sold a sizable lot of HRC for early March delivery to a EU based trading firm at around $700/mt FOB, which, however, has not been finally confirmed by the time of publication, while sources said it was the highest level of the past week.
A small deal was also reported to a non-EU destination at $660/mt FOB, the sources said.
