Indian flat steel exporters, both large steel mills and trader-exporters have continued to be aggressive in pushing volumes amid rising inventories and pressure to lower offers to pass on the benefits of the deprecation of the rupee against the dollar to buyers and successfully improve volume shipments, traders said on Monday, August 26.
Market sources said that flat steel export offers have largely been lowered across the board by around $10/mt as exporters have been seeking to pass on the benefits of higher margins due to the Indian rupee inching close to INR 71.80 a dollar through lower offers and have been able to conclude higher-volume contracts particularly in key markets like Vietnam during the past week.
“Both large steel mills and trader-exporters are pushing exports aggressively in the face of sluggish domestic sales and the steady tightening of liquidity and the shortage of credit availability from lending institutions,” a Mumbai-based trader said.
Though there are some expectations that an improvement in the local market in October may ease the desire of mills to push large volumes abroad, the downtrend is likely to persist in September as Indian producers still have some sizable volumes for September shipment unsold. “Indian mills will have to sell at least 150,000-200,000 mt of HRC for September shipment in the export market even despite the large quantities which have already been booked,” an Indian source said.
Indian HRC export offers
During the past week, Indian hot rolled coil (HRC) offers have decreased by $10/mt to the range of $455-465/mt FOB, according to market sources. Moreover, some mills have decided to provide additional discounts, selling at $450/mt FOB on average to Asia and Europe.
Both large steel mills and trader-exporters have increased activity in the export markets with higher levels of success in concluding contracts and also have improved average shipment volumes overseas in key Asian markets, the sources said.
The sources said that a large western India-based steel mill successfully concluded an export contract for 50,000 mt HRC for September delivery to Vietnam at $478/mt CFR in the middle of August, indicating that the seller may have offered a small volume discount on FOB basis to conclude the deal. At the same time, a leading western India-based trader-exporter has reportedly concluded a 4,000-5,000 mt contract at $477/mt CFR. At the end of last week, a deal for 10,000 mt was closed at $474/mt CFR, SteelOrbis understands. This contract to Vietnam brought the FOB price level from India to $454-458/mt. Nevertheless, traders have been able to provide additional discounts and have been selling at a few dollars below the mills’ price level. “The latest deals from Indian mills have been done at $475/mt CFR [$455/mt FOB] on average, while the latest deals from traders have been concluded at $470-473/mt CFR,” an Indian exporter has told SteelOrbis.
An eastern India-based steel mill has reportedly concluded an export contract with buyers in the neighboring market of Nepal at around $465/mt FOB, although a section of the market claimed that the deal was concluded after an additional five percent discount.
There has also been information about a deal for 60,000 mt of Indian HRC to Italy at $480-485/mt CFR ($445-455/mt FOB) for late August-early September shipment. “The mill was in hurry to sell as no one else had August shipment coils,” a source explained. Overall demand in the European Union (EU) stayed at low levels and mills expect some recovery in sales next week.
Demand in the Middle East has stayed at relatively low levels over the past week, with offers coming at $480/mt CFR and above.
Indian CRC export offers
Indian cold rolled coil (CRC) export offers from large domestic mills have moved down by $10/mt week on week to the range of $495-500/mt FOB, according to market sources.
Buyers in key markets like Southeast Asia did not respond to these offers, the sources said. However, a few trader-exporters have been successful in concluding transactions for modest volumes for September delivery to buyers in the EU, although price indications have not been readily available in the market.
Indian steel plate export offers
Indian export offers for steel plates have decreased by $10/mt during the past week to $555/mt FOB, according to market sources, who added that no successful contracts have been reported in the market.