Weak prices and demand in the Asian markets where ex-India hot rolled coil (HRC) valuations were not finding many takers even after the marginal lowering of offers have prompted local integrated mills to focus on sales to the Middle East and renewed small-volume trades to the EU, SteelOrbis learned from trade and industry circles.
Ex-India HRC prices are in the range of $970-990/mt FOB, almost stable compared to a week ago, but this price level excludes the sales prices to the EU, which are up to $1,050/mt FOB, as volumes have been limited so far, and more time is needed for the market to see developments in the near future, sources said.
Indian mills have failed to trigger any demand in key Asian markets like Vietnam, where buyers were tending to put a valuation at below $950/mt on CFR basis.
One of the major focuses of Indian HRC exporters has been the Middle East market recently. Late last week and early this week, 20,000-30,000 mt of Indian SAE1006 HRC have been booked to this destination at $1,035-1,040/mt CFR, translating to $985/mt FOB or so. This happened after 75,000 mt of ex-India SAE1006 HRC was sold to the GCC region at $1,038-1,050/mt CFR, as SteelOrbis reported earlier.
According to sources, apart from the Gulf region, deals during the past week were reported with buyers in Spain and Italy where higher ex-India prices were more acceptable.
The sources said that a western Indian exclusive flat steel-producing steel mill reported a trade with buyers in Spain for an estimated tonnage of 8,000 mt, while another western India-based steel mill reported a trade for 12,000 mt with buyers in Italy. The final price in the small-volume deals to Europe was at $1,120/mt CFR on average, according to market sources. The material is sold under the expected new quota. However, according to some market participants, most bids from Europe are at a lower level.
It has been pointed out that, though sales volumes in these EU markets were modest compared to deals in the previous months, protecting realizations was the focus of exporters rather than chasing higher-volume discounted deals in Asian markets.
“Most Southeast Asian markets are reporting a slowdown in manufacturing leading to depressed demand for imports. Also, ex-China HRC offers are reported in the range of $940-960/mt on CFR basis. Indian exporters are unwilling to be so aggressive in taking risks of lower realizations, ahead of realizations from sales in the local market,” an Indian official said.
“The current acceptable price among Asian buyers is unworkable for local exporters as it is almost on a par with local HRC realizations, negating any export incentive. Volumes to other markets will grow steadily, reducing exporters’ high reliance on Southeast Asia” he added.