Ex-India hot rolled coil (HRC) prices have remained relatively stable over the past week, with a slight upward bias driven by rising costs. However, trade activity has been largely stalled due to limited export allocations from mills, which remain comfortable with their domestic sales, and since cautious buyers have been unwilling to take on the risks associated with the prolonged geopolitical tensions in the Middle East.
More specifically, ex-India HRC prices have been estimated at around $530/mt FOB for the Middle East, up from $520-530/mt FOB last week, with a few offers heard at even higher levels around $550/mt FOB. Notably, at least two large mills have reported ongoing sales negotiations with buyers in the UAE and Saudi Arabia, but it has been difficult to arrive at agreements on freight and shipment costs in CIF (cost, insurance, freight)-based contracts. According to an official familiar with the ongoing negotiations for aggregate volumes of 25,000-30,000 mt, the main point of contention has been the level of discount sought by buyers to partially offset elevated CIF-based prices, driven by higher freight rates and shipping surcharges to the region.
Meanwhile, offers to Europe have remained at $600-620/mt FOB, the same as last week, but ongoing uncertainties around the CBAM certification process, along with the additional levy that buyers must pay, have continued to slow down sales to the region.
At the same time, according to sources, indicative offers for ex-India HRC in Vietnam have been reported at around $600-610/mt CFR, which translates to around $580/mt FOB, versus a deal price at $560/mt CFR reported last week.
Thus, the SteelOrbis reference price for ex-India HRC has remained at $530-620/mt FOB, up by $10/mt on the lower end of the range week on week.
“The resumption of sales talks in the Middle East is a mild positive. However, previous difficulties in closing deals during the ongoing conflict which now appears prolonged continue to weigh on sentiment. For any agreements to materialize, sellers will likely need to offer discounts, which remains a major hurdle given the cost pressures they are facing,” an affiliate of Tata Steel Limited told SteelOrbis.
“Sellers are taking a cautious approach to exports. Domestic demand remains solid despite some recent price corrections, and mills have already allocated only limited volumes for export. As a result, there is little economic incentive to pursue aggressive overseas sales,” he added.
