Ex-India hot rolled coil (HRC) have been pulled down due to rising competition from cheaper alternatives and buyers in key markets like Europe reducing activity in the local market, while Gulf buyers have switched to alternative sourcing, SteelOrbis has learned from trade and industry circles.
The SteelOrbis reference price for ex-India SAE1006 2 mm HRC has come down to $680-750/mt FOB with the midpoint at $715/mt FOB. The higher end of the range went down by $20/mt over the past week, reflecting the weakening seen in the EU.
Though official offers have been reported in the range of $720-740/mt FOB, the tradable levels in all markets except Europe have been below the $700/mt FOB mark. Sources said that comparatively higher prices are still achievable in Europe (up to $750/mt FOB), although on lower volumes, while deal prices have been lower for sales concluded in the MENA region.
Offers for ex-India 2 mm HRC to Europe have slipped to $800-825/mt CFR, versus $820-840/mt in recent weeks. While $820-825/mt CFR offers ($750-765/mt FOB) are for June shipment and mainly structural grades coils, lower prices of $800/mt CFR are possible for May shipment re-rolling HRC.
A deal for a relatively small volume of ex-India HRC for delivery to Egypt has been reported at $690/mt FOB, sources said.
At least two offers submitted by an eastern India-based mill in the range of $700-730/mt FOB to an Oman-based trading firm did not reach the negotiation stage with the buyer settling for alternative sourcing, indicating the weakening of sellers’ recent pricing power in overseas markets.
In the UAE, offers for ex-India coils for both May and June shipments have been at $720-740/mt CFR, translating to $685-705/mt FOB. In addition to lower demand during Ramadan, interest in ex-India coils have been disrupted by far lower ex-China offers, which have been heard at $650-670/mt CFR.
“Exports are becoming challenging for Indian mills in the face of rising competition led by ex-China material. India is out of most Asian markets. Overseas sales have been entirely dependent on Europe largely and to some extent on the MENA region. But these markets are also showing signs of resistance as distributors are fully stocked and are unwilling to commit fresh bookings unless deep discounts are on offer,” a source at a large Indian source said.
“A clearer picture and trend will emerge after full business activity resumes after the extended weekend holidays in Europe. We expect limited overseas sales in the short term. Going forward it is uncertain, but we are optimistic that the downside in ex-China prices may have run its course,” the source said.