The Indian hot rolled coil (HRC) export market was pushed deeper into the limbo with local sellers claiming aggressive price under-cutting by exporters from China and Indian mills declining to adjust prices much, riding on sufficient domestic demand and cost push, SteelOrbis learned from trade and industry circles.
Most suppliers from India have not announced new prices with the previous targeted level at $870/mt FOB or slightly lower being not competitive in the current conditions.
Some deals as low as $800-810/mt FOB for ex-China SAE10006 were heard from mills and the tradable level for Indian coils should be at a similar level, sources believe. Chinese sellers may offer even lower level for position cargoes from traders – at $810/mt CFR to Vietnam for February shipment and beyond.
As a result, the reference price for ex-India HRC has slipped to $800-850/mt FOB, down by $15/mt on average from $830-850/mt FOB in the previous week. But the lower end of the range corresponds to the nominal price, which is close to the tradable level in Southeast Asia.
“Competition is intensifying between India and China in the export markets. The balance is tilting in favor of Chinese exporters as their domestic demand is waning and are able to be more aggressive in pricing to push volumes overseas. In contrast Indian mills are advantaged by strong local demand. Their export pricing is also hamstrung by higher dependency on imported coking coal and its high prices,” a steel sector analyst with a Mumbai financial ratings firm said.
“This emerging trend of India-China competition, particularly in the Asian market is getting evident from fact Indian finished steel exports decline 22 percent in October year-on-year,’ he said.
Sources said that Indian exporters were largely engaged in small volume deals in Gulf region where acceptable price of buyers was slightly better than in traditional Asian markets.