Ex-India hot rolled coil (HRC) prices have officially been kept unchanged over the past week, but large mills under pressure from the domestic slowdown have still been rather flexible and among other Asian suppliers they have remained among the most competitive, though any additional significant discounts have not been available this week, SteelOrbis learned from trade and industry circles on Tuesday, June 16.
The lowest price level for Indian HRC is still seen in the Vietnamese market. The latest confirmed deal was for a mixed lot of 30,000 mt of SS400 and SAE1006 HRC at $552/mt CFR, a number of sources confirmed, which is $3/mt below the previous contract at $555/mt CFR. The contract price translates to $522-527/mt FOB. Some small price increase has been heard for India offers on June 16 - the lowest level was $553-555/mt CFR for a mixture of SS400 and SAE1006, though at least one trader said it hears $555-560/mt CFR as a common offer level from India for now. “It is still rather low compared to China and Indonesia,” a Vietnam-based source said.
Ex-India offers have been disclosed in the range of $550-555/mt FOB for the Middle East market, but there have been no new deals after three vessels sold to the GCC at $600/mt CFR (which is $545-550/mt FOB at the highest). Bids in this destination should be at $540/mt FOB at the highest, market sources said.
According to some traders, there have been tentative signs of sentiments firming up in Europe, but this was largely based on lower imports and distributors lacking clarity on new tariff quotas and challenges in complying with barriers like the carbon tax regime. Some Indian mills have resumed offers at $600/mt FOB or so, but most market sources agree that the tradable levels to this destination are at $580-590/mt FOB, in line with the previous deals.
One of Indian mills is heard to have signed a contract for 25,000 mt to an undisclosed destination at $520/mt FOB, sources said, but this could not be confirmed in any final destination, and the price has been assessed as being on the low side.
“The slowdown in stock movement in the local market is expected to gain momentum as the monsoon season gets underway. Pressures from inventories are also rising. Overseas buyers are resisting higher prices and hence discounting is among the very few options to liquidate stocks,” an Indian source said.
“Discounting will have its limitation against the backdrop of rising production costs. Key destinations are still very price-sensitive. However, the US-Iran deal and the imminent opening up of trade via the Strait of Hormuz can be expected to change market dynamics in the Gulf region in a positive way. It will take some time, but we expect positive trade dynamics to emerge from the peace deal and price directions to change,” he added.
The SteelOrbis reference price for ex-India HRC has seen stable at $520-580/mt FOB.
