Indian integrated steel mills have pushed up hot rolled coil (HRC) export prices further by a significant margin over the past week, but have kept the number of offers limited as producers are facing challenges in firming up export allocations for the current quarter. Higher deal prices for Indian coils were done to Asia and the MENA region, SteelOrbis learned from trade and industry circles.
Ex-India HRC prices are at $940-1,010/mt FOB with the midpoint at $975/mt FOB. The lower end of the range went up by $30/mt from last week, which reflects the latest sale to Vietnam, while the higher end of the range of export HRC prices added $10/mt over the past week.
Industry officials said that most integrated steel mills, JSW Steel Limited, Jindal Steel and Power (JSPL), ArcelorMittal Nippon Steel (AMNS) and Steel Authority of India Limited (SAIL), have stated that the outputs of their mills will be impacted by diversion of oxygen for medical purposes. They said that, as the extent of lower production is difficult to forecast, it is very difficult to fix quarterly export allocations, forcing sellers to limit the number of offers submitted even though the interest of buyers in key destinations like Southeast Asia remains strong.
Officials said the lower volumes being put up on offer have been enabling sellers to increase prices and the aggressive pricing strategy will continue as the fresh EU quota for Indian origin HRC is expected to kick in later this month.
“With the export rebate cut coming into effect in China, the finished steel price outlook is very positive with a significant upside potential. It's only a matter of time before ex-India HRC price touches the $1,000/mt FOB mark,” a steel sector analyst from a Mumbai financial services firm said.
“Even with the expected local demand contraction, a 10-20 percent fall in aggregate steel output of all mills and fresh buying from the EU will offer opportunities for higher realizations from overseas sales, offsetting challenges in the local market,” he added.
One of the major Indian mills concluded a deal for 20,000 mt to Vietnam at $975/mt CFR, translating to around $940/mt FOB or higher up to $950/mt FOB if the freight for June-July shipments falls. Most fresh offers to Vietnam were heard at $1,000-1,020/mt CFR.
Another deal for an estimated volume of 35,000 mt was reported by an eastern India-based seller at a price of $940-950/mt FOB with a Singapore-based trading firm, the sources added.
Also, a contact for approximately 20,000 mt of Indian HRC from a large mill was sold to Egypt at $1,050/mt CFR, corresponding to slightly above $1,000/mt FOB.