Ex-India hot rolled coil (HRC) prices have remained under strong pressure from the sharp rise in inventories at mills, as only modest-volume deals have been concluded in Asia at low prices and slightly higher realizations could be found in the UAE and Egypt, SteelOrbis has learned.
Ex-India HRC prices range at $710-730/mt FOB with the lower end of the range down by $10/mt over the past week. Bids from Asia are coming at $700/mt FOB or so, but there has been no confirmation of new deals at this low level.
Sources said that the mills had no option but to cut offers as all producers are near an estimated four-month high in inventory levels and Vietnam buyers are only interested in low-priced deals.
According to the sources, overall trade volumes in the Asian region are extremely low. An eastern India-based mill is said to have sold 5,000 mt to Vietnam at $700/mt FOB or slightly above for February shipment, with no official confirmation of this.
Slightly higher realizations have been heard from sales to the UAE, with a Maharashtra-based steel mill concluding a deal for 8,000 mt at $720-730/mt FOB, the sources said.
Market sources said that an Egypt-based buyer has confirmed a booking for 10,000 mt of HRC at a price of around $725-730/mt FOB, but the identity of the seller could not be ascertained in the market.
“Indian export prices are at a sharp discount to local trade prices even after the slump in domestic prices. Export margins are minimal on current bookings but producers have little choice in the face of rising inventories which will continue in the last quarter, and Asian buyers are unwilling to accept any higher prices,” a source at Steel Authority of India Limited (SAIL) said.
According to a Mumbai-based distributor with a selling presence in Asia, deals at around $700/mt FOB are not sustainable for traders or mills and, while the latter are still to fix export allocations for the last quarter of the current fiscal year, current indications are that most integrated mills will sharply reduce volumes for export despite the all-round slowdown, to limit the impact of low or negative realizations as the closing of books at the end of the year approaches.
