Ex-India hot rolled coil (HRC) prices have been kept relatively unchanged over the past week, but most mills have paused their submission of offers especially in the wake of the closure of trade corridors through the Middle East and rising risks and costs of logistics and insurance following the US-Israel attack on Iran.
More specifically, indicative offers for ex-India HRC have been estimated at $490-500/mt FOB for the Middle East, down by $5/mt on the lower end of the range week on week. However, according to sources, not only have most mills halted submission of offers, but FOB-based rates have been rendered largely irrelevant by uncertainties surrounding shipping lines, freight, insurance and war risk premiums.
Sources said that several global shipping lines have stopped accepting freight traffic through corridors in West Asia. In addition, several Indian and foreign shippers have cancelled certain cargo and protection and indemnity (P&I) covers. While some of these covers may be renewed, this would only happen after renegotiating premiums. Typically, these premiums average around 0.2 percent of a vessel’s value, but they could now increase to 0.5 percent. The heightened risks and rising costs have created significant distortions in FOB-based quotations submitted by exporters, the sources added.
According to an official at an eastern India-based integrated mill, no offers are currently being made, as exporters are uncertain about securing vessels designated by shipping lines for cargoes destined for or transiting through the Gulf region. In the absence of vessel nominations, neither buyers nor sellers have clarity on logistics costs or insurance premiums.
“There are too many uncertainties surrounding export logistics. Neither sellers nor buyers have sufficient visibility on these factors to determine rational pricing. No fair sales contract can be concluded under the current geopolitical situation. It is better to wait and watch and hope that the Middle East situation does not persist,” an official at a private mill told SteelOrbis.
In the meantime, ex-India HRC offers to Europe have remained rare, with indicative offers for ex-India HRC in Europe reported at $620-625/mt CFR, which translates to around $565-570/mt FOB, the same as last week.
Furthermore, offers for ex-India SAE1006/SS400 HRC in Vietnam have been heard at $493-495/mt CFR, the same as last week or at around $475/mt FOB, while bids have been reported at around $490/mt CFR.
Thus, the SteelOrbis reference price for ex-India HRC has settled at $475-570/mt FOB, the same as last week.