Ex-India hot rolled coil (HRC) export sentiments have remained mixed in the past week, with a widening gap emerging between mills’ offers and actual transaction levels. While major producers have attempted to push prices higher on the back of rising production costs, buyers have largely resisted, keeping the flow of deals subdued. Market talk suggests that in key destinations such as Vietnam, transactions may be concluded at discounts of around $30/mt below reported offer levels, raising questions about the sustainability of current pricing indications and highlighting growing pressure on sellers to realign expectations with the market reality.
More specifically, indicative offers for ex-India HRC in the Middle East have been estimated at around $550-560/mt FOB, up by $10-20/mt week on week. At least two large mills confirmed sales negotiations against enquiries from the Gulf Cooperation Council (GCC) region. But final sales contracts have been stalled owing to the lack of consensus on shipping routes and buyers seeking discounts to partially offset higher CIF (cost, insurance, freight) rates. According to the sources, sellers are unwilling to push discounted sales, which would largely nullify cost increases and erode margins.
Meanwhile, offers submitted in Europe have remained at $620-640/mt FOB, which translates to around $700-720/mt CFR. However, information trickling into the market indicates that at least two or three large mills are still awaiting carbon emission certifications mandated under the Carbon Border Adjustment Mechanism (CBAM) from accredited agencies enabling further price negotiations on ‘live’ enquiries.
At the same time, while indicative offers for ex-India HRC to Vietnam have been reported at $610-615/mt CFR, equivalent to around $590/mt FOB, market insiders have reported a deal for around 20,000 mt signed at $585/mt CFR this week, which translates to around $555-560/mt FOB. However, this information has not been officially confirmed by the time of publication.
“HRC prices are showing signs of firming up but underlying demand in key destinations is on the weaker side. Some inquiries are coming in. But usual deal maturing timelines are now getting extended because of regulatory and logistical challenges. There is also an imbalance between offer price and a workable CIF contract price,” an affiliate of Tata Steel Limited told SteelOrbis.
