Prices for ex-India hot rolled coil (HRC) have remained relatively stable over the past week, although trading activity has continued to be sluggish. Buyers have remained cautious, as the now month-long conflict in the Middle East has disrupted traditional trade flows, forcing market participants to explore alternative shipping routes. At the same time, rising domestic prices in India now exceeding $550/mt ex-works have strengthened mills’ preference for the local market, with most producers avoiding firm export offers. Market participants expect the domestic uptrend to persist for at least the next one to two months, further limiting export availability.
More specifically, while indicative offers for ex-India HRC in the Middle East are at $520-530/mt FOB, but some sales negotiations were heard to have begun at lower base offers in the range of $480-500/mt FOB as ‘comfort’ to the buyers and partially offset higher freight costs through alternative shipping routes. While neither buyers nor sellers were willing to disclose details of ongoing sales talks, leaders in trade said they were privy to discussions of some tonnages being considered for deliveries to the UAE through alternative Red Sea shipping routes to transshipment destinations like the port of Jeddah, Saudi Arabia.
“The now month-long war in the Middle East is forcing exploration of alternative routes via the Red Sea to the UAE and the Cape of Good Hope to Europe. But whether these will be economical based on CFR prices is still very debatable. It will need a lot of optimism to expect sales to go through unless sellers are discounting deeply,” an associate of Tata Steel Limited told SteelOrbis.
“It is not confirmed but we hear that at least two shipments heading for Oman are returning. Can sellers take on such a risk? We are in the dark,” he added.
Besides, ex-India HRC offers to Europe have been reported at approximately $590-600/mt FOB, the same as last week. According to market sources, Indian HRC producers have begun progressing with CBAM-related requirements, with major mills currently undergoing pre-verification processes and expecting to have key elements in place within the next couple of months. However, uncertainty remains as the EU has yet to formally nominate or declare the authorised verification agencies. “Full compliance will only be achieved once certificates are issued by officially appointed verifiers. In the meantime, mills are actively engaging with multiple verification bodies to improve their chances of working with agencies already familiar with their operations, particularly those that have previously conducted factory audits, to streamline the process and shorten timelines,” a market insider told SteelOrbis.
At the same time, offers for ex-India HRC in Vietnam have been estimated at around $535-540/mt CFR, the same as last week, which translates to around $515-520/mt FOB.
Thus, the SteelOrbis reference price for ex-India HRC has settled at $515-590/mt FOB, up by $5/mt on the lower end of the range week on week.
