Indian steel mills have left the market this week due to the Diwali festival, which started on October 24, but even late last week most rare offers for ex-India HRC were uncompetitive in the global market, taking into account the rapid declines of ex-China, ex-South Korea and ex-Japan quotations, as SteelOrbis learned from trade and industry circles. Though some expectations of a modest price increase in the local Indian market exist for November, the outlook for the export market is bearish.
Sources said that ex-India HRC prices have been quoted in the range of $550-570/mt FOB, stable from last week, but bids received from Vietnam at $560/mt on CFR basis at the highest and at $590-600/mt CFR from Gulf buyers have been contributing to the ongoing poor market activity.
According to trade sources, some small tonnages up to 5,000 mt in total have been traded at $555-560/mt FOB for a trading company. But this has been mainly an exception. In Vietnam, China can provide $560/mt CFR for boron-added SAE1006 HRC, while the lowest indication from one Indian mill was at $580-590/mt CFR before the holiday.
In Turkey, the lowest offers from the same mill were at $605-610/mt CFR last week, while other Indian producers are still quoting at $630-640/mt CFR, which is far above the real market level. Chinese material can be booked much more cheaply in Turkey, at $580-590/mt CFR.
In the Gulf market, the competition with Chinese sellers is also very tough as they can offer at $590/mt CFR, versus $605/mt CFR minimum from one Indian supplier.
“Buyers in Asia are in no hurry to conclude deals, expecting downward momentum to gain pace. There are a lot of cheap offers from China, and Indian sellers cannot keep pace with cutting prices as aggressively,” a source at a private mill said.
“Local mills are not submitting too many offers, also because of the festival holidays. But the bearish export trend is unlikely to be reversed as the markets are still some way from a new bottom,” he said.