Stepping up export volume allocations for the current quarter and aggressively pushing higher volumes overseas to offset weak local demand, Indian integrated steel mills have increased hot rolled coil (HRC) export prices again during the past week, with higher-priced deals already having been done, SteelOrbis learned from trade and industry circles on Monday, May 11.
Ex-India SAE1006 HRC has been priced at $980-1,020/mt FOB, with the higher end of the range adding $10/mt and the lower end up by as much as $40/mt from last week’s level of $940/mt FOB. Moreover, stray deals at the highest level of above $1,000/mt FOB have already been confirmed to Asia early this week.
Officials at at least two integrated steel mills said that, if strong buying sentiments in key markets like Vietnam are sustained over this month and the expected fall in ex-China material coming into the market gains momentum in the wake of the tax rebate cuts, Indian producers will target HRC export prices of at least $1,050/mt FOB in the short term.
This expected price push is also triggering a sharp increase in the number of bids received during the past week, the officials said.
“With local HRC prices pushed up to levels just slightly above $900/mt ex-works, it is natural for local steel mills to leverage strong overseas demand to push up export prices well above the $1,000/mt FOB mark if weak local demand is to be compensated for by higher export realizations,” a steel sector analysts at a Mumbai-based rating agency said.
“We have reports from several steel mills that their export allocations for the April-June quarter are already 15-20 percent higher than the corresponding period of the previous year. This is very significant as, at the aggregate level, steel mills are expected to report lower production during the quarter amid the impact of entire oxygen supplies going for medical use,” he said.
Sources said that an eastern India-based steel mill has reported a deal for an estimated tonnage of 30,000 mt at a price of around $980/mt FOB or slightly higher with a Vietnam-based buyer for July delivery. This price translates to $1,020/mt CFR Vietnam.
A western India-based integrated exclusive flat steel producer has reported a trade for around 40,000 mt with a Singapore-based trading firm at a price of around $980/mt FOB, the sources said.
Just today, information about a fresh deal at $1,060/mt CFR Vietnam from one of the major Indian producers has been confirmed in the market. This brings the FOB price to $1,020/mt FOB or even slightly above.