Indian hot rolled coil (HRC) export activity has been limited over the past week, with prices mainly stable or showing a slight increase, supported by strong domestic demand, firm local prices and tight supply conditions. Most mills have continued to prioritize domestic sales and have showed little willingness to adjust their export offers, as domestic margin realizations have continued to outperform export returns.
More specifically, ex-India HRC offers have been reported in the range of $475-480/mt FOB in the Middle East, or around $495-505/mt CFR, the same as last week, though a few bids received from UAE-based customers have been voiced in the range of $465-470/mt FOB, but sellers are unwilling to make even minor adjustments against the backdrop of tight supplies and good local sales.
Furthermore, this week offers for ex-India HRC in Vietnam have been voiced at $493-500/mt CFR, compared to $487-490/mt CFR at the beginning of last week, which translates to around $473-480/mt FOB. However, according to sources, Vietnamese customers’ bids are still voiced at lower prices of around $490/mt CFR and slightly below.
At the same time, ex-India HRC offers in Europe have remained rare. Indicative offers for ex-India HRC in Europe have been voiced at $600/mt CFR and above, the same as at the end of last week, but up by $30/mt since the beginning of last week, which translates to around $550/mt FOB.
As a result, the SteelOrbis reference price for ex-India SAE1006 HRC has settled at $475-550/mt FOB, up by $5/mt on the lower end of the range since the end of last week, and compared to $470-520/mt FOB at the beginning of last week.
Sources said that most large mills have been holding back offers at a time when both local demand and prices are very strong, with signs that demand is outpacing supply. According to a steel sector analyst at a Mumbai-based financial advisory firm, domestic sales margin realizations for large mills have, on average, exceeded export margins by 10-20 percent on ex-plant basis under current local market conditions, depending on the HRC grade.
“There is no activity seen in Europe. Despite European mills led by ArcelorMittal increasing prices, risks of trade barriers are disincentives for imports,” an affiliate of Tata Steel Limited told SteelOrbis
“Indian mills are not active on exports. The strong local market and tight supplies mean that exporting mills’ exportable volumes are minimal. However, with China heading for holidays, fewer players may offer a window to sell overseas. But this is largely dependent on how the bullish domestic market sustains,” he added.
