Helped by weakening of the local currency, Indian flat steel exporters have lowered offers to push volumes overseas to cope with sluggish domestic sales, but with limited success in the face of stiff competition from ex-China offers and buyers’ demand for higher discounts which have generally not been accepted, traders said on Monday, August 12.
“The weakening of the Indian rupee beyond the INR 70 to the dollar mark has enabled local steel mills and trader-exporters to marginally lower offers in line with lower ex-China offers. But buyers have been seeking discounts anticipating a further softening of finished steel prices, resulting in only a limited volume being transacted during the past week,” a Mumbai-based trader said.
“However, the export push aimed at tackling sluggish domestic sales can only have a limited impact since much of the trade activity has remained confined to HRC while Indian CRC continues to find few overseas buyers at a time local sales of the flat product remain at an all-time low,” the trader added.
Indian hot rolled coil (HRC) offers are down a marginal $5/mt week on week to $485/mt FOB, according to market sources. However, to attract customers, suppliers have had to cut prices and sell at $475/mt FOB and even a few dollars below this level in Southeast Asia.
The sources said that buyers in key overseas markets like Vietnam are reportedly seeking discounts ranging around 10 percent and, with local exporters refusing to accede to such requests, contracted volumes have remained very low.
According to sources, the aggregate ex-India HRC export trade volumes in the past week are estimated in the region of around 8,000 mt, and the ability to push higher volumes will largely depend on exporters’s ability to further price offers more aggressively or offer selected discounts if the Indian currency continues to weaken further.
At least two other traders have confirmed that a western India-based large steel mill has concluded an export contract for a significant volume to a buyer in the Gulf Coordination Council (GCC) region but, since the deal was between a producer and an actual end-user with no intermediary involved, the information on the exact contract volume has not been available in the market.
Indian cold rolled coil (CRC) offers have been reduced by $10/mt during the past week to $530/mt FOB, according to market sources.
However, the sources said that, apart from export deals for minor volumes concluded by Indian traders with buyers in neighboring markets like Nepal and Bangladesh, no significant deals have been reported by any of the large Indian steel mills during the past week.
Plates
Indian export offers for steel plates have been kept unchanged week on week at $565/mt FOB, according to market sources, who added that there have been no reports of any deals by either trader-exporters or large steel mills.