Indian hot rolled coil (HRC) exporters have been able to boost trading activity after dropping prices over the past two weeks, compelled by rising inventories and sluggish domestic sales. The latest decline was relatively small and there have been sharp variations in realizations from various destination markets, according to SteelOrbis’ sources.
Ex-India alloy HRC prices have settled at $630-650/mt FOB this week, down marginally by $5/mt on average from $630-660/mt FOB last week, with the prices at the lower end for markets like Vietnam, but sellers were able to secure slightly higher realizations from sales in the UAE.
The sources pointed out that there was a lot of “anxiety over rising inventories” among local steel mills, that has prompted them to continue cutting export prices and the current price is almost equivalent to the low export price of $620-630/mt FOB prevailing at the end of 2020.
“I would consider current exports of flat products to be a fire sale by producers. At 15 percent export tax for non-alloy steel and given current realizations, sellers are not making much margins from such sales. Mills at best are lowering carrying costs of inventories from such overseas sales,” a Mumbai-based steel sector analyst said.
Among the highest prices have been those achieved by Indian sellers in the Gulf region. In particular, around 78,000 mt of ex-India boron-added HRC have changed hands at $710-740/mt CFR with the higher end of the price range corresponding to thinner coils and not included in the reference price. The level of $710/mt CFR UAE translates to about $650-660/mt FOB, according to sources. Moreover, one Indian mill was able to provide even $680/mt CFR to the UAE.
In Vietnam, fresh offers from India have been at $665-675/mt CFR or $630-640/mt FOB. This price level is among the most competitive (excluding ex-Russia HRC which is not popular in Vietnam due to Western sanctions), but no new deals have been heard so far after the sale of 60,000 mt reported by SteelOrbis last week.
Offers for Indian coils to the European market have also declined, coming to around $740-750/mt CFR Italy, versus $750-760/mt CFR previously.