Ex-India hot rolled coil (HRC) official offers were kept almost unchanged by sellers, but trades were reported at lower levels only, and for smaller tonnage than seen last month, SteelOrbis learned from trade and industry circles.
Ex-India SAE11006 2 mm reference HRC prices have been at $660-720/mt FOB, down by $5/mt on average from that reported late last week. The lower end of the range was reflecting one successful trade in the Middle East, though overall competition has been tough, taking into account aggressive Chinese offers. The higher end of the range has not changed from that seen last Friday with the EU buyers still accepting higher valuations, but the pressure from lower ex-Asia offers has been growing in this market too.
An eastern India-based integrated mill reported a deal for small tonnage of re-rolling grade HRC for the UAE delivery at around $690/mt CFR for June shipment, the sources said, which translates to around $660/mt FOB. Though a number of mills in India have been not ready to give lower than previous offers at $720/mt CFR, this level has been fully unworkable and so producers have been not actively offering to the Middle East.
In Europe, the most workable offers have been reported at still $760/mt CFR for Indian coils, same as in the last contract reported late last week. One smaller trade has been reported at a bit higher level - $770/mt CFR Antwerp, but most market sources agree that Indian mills will have to keep dropping prices to push sales in Europe. One of the major reasons is the low-priced offers from Asia with Vietnam giving €670/mt CFR or around $740/mt CFR.
Sources said that as in recent weeks, offers submitted in key Asian markets like Vietnam were ‘being kept on hold’ in view of wide bid-offer disparity. Weak Asian market conditions, was seen in ex-India offers in Vietnam at $670/mt FOB but bids were not higher than $620/mt FOB and hence sellers were not following up offers already submitted.
“There is some improvement at the trading activity level as the EU buyers are making a tentative return. But there is a lot of pessimism over prices. Sourcing options for buyers in Europe has increased and this will keep prices under pressure,” an official in a private mill said.
“There is a lot of export allocation available with Indian mills. But overseas trade volume is falling. So mills will have to take a strategic call on more aggressive overseas sales or divert exportable volumes to local sales at lower margins,” he said.
