Indian flat steel exporters have led by large local steel mills have lowered their offers across board during the past week, by adopting an aggressive pricing strategy in order to push volumes overseas to part compensate slow movement of stocks in domestic market and to control rising inventories, traders said on Monday, June 3.
“An aggressive export pricing is a compulsion of Indian exporters in reaction to overall softening of ex-China flat steel offers to key markets in Southeast Asia. Large Indian steel mills are also facing challenges of rising inventories and attempting to increase overseas shipments but with limited success,” a Mumbai based trader said.
“While number of export contracts reportedly has increased slightly, average volume of the contracts have remained on the lower side. This largely because key buyers in markets like Vietnam and Indonesia have been cautious in committing large volumes anticipating ex-China offers will continue edging down in the coming week, in view of global trading uncertainties,” he added.
Indian export offers for hot rolled coil (HRC) have decreased by $20/mt to $530/mt FOB, according to market sources.
The sources said that reports in the market suggested that at least two western India based steel mills were successful in concluding contracts for aggregate volume estimated in range of 8,000-9,000/mt with buyers in Vietnam and Indonesia.
At the same time, merchant exporters reportedly concluded export contracts for aggregate volume of 7,000/mt with part of the volume to be shipped to Nepal by end-June, the sources added.
Indian cold rolled coil (CRC) offers have declined by $15/my during the past week to $545/mt FOB, according to market sources.
The sources said that large domestic exporting steel mills were unable to conclude contracts for any significant volumes with buyers in markets like Indonesia and Vietnam turning down offers possibly preferring ex-China material which were prices more competitive vis-à-vis ex-India CRC.
However merchant exporters concluded modest volume contracts aggregating in range of 4,000-6,000 mt mostly with buyers in neighboring markets like Nepal and Bangladesh, the sources added.
Indian steel plates export offers have decreased by $20/mt during the past week to $575/mt FOB according to market sources but added that no reports of any significant volume contract was reported.