The Indian flat steel market is seen to be undergoing a revival. However, the mills' attempt to hike their offers appears unlikely to succeed for the moment. We mentioned in an earlier analysis that inventory levels had increased significantly due to traders' previous position purchases. Meanwhile, new production materials have arrived in the market and the export volume has not reached the desired levels, and so inventories have increased further, thereby putting pressure on the mills just as they are seeking to increase their prices. Local Indian traders' offers for imported hot rolled coils (HRC) of mixed sizes are standing at INR 31,250-31,500/mt. Producers' asking prices are INR 500-1,000/mt lower than these levels due to the tonnages involved and regional price differences.
Ex-China offers to India for 3.0-12 mm x 1,500 mm x C boron-added hot rolled coil (HRC) are at the price level of $630/mt FOB and offers for 2.5 mm x 1,250 mm x C boron-added HRC are at $670/mt FOB, while offers for 2 mm x 1,250 mm x C non-boron-added HRC stand at $680/mt FOB - all for October shipment. It would be difficult to say that many transactions have been concluded at these levels. Buyers' price ideas are lower than the ex-China offers. Most flat steel buyers prefer to make purchases from the domestic market.
India's export markets lack strength at the current time. In previous weeks, some Middle Eastern transactions were mentioned. Indian market players' offers to Europe are seen not to be at acceptable levels. European buyers prefer to purchase either from the CIS countries or from their domestic markets. India, which has long been an important galvanized coil exporter, has not been very active in exporting this product lately due to the weakness of the international markets. For instance, offers given by Indian traders to the Polish steel market for 1.45 mm 100 gr/m² zinc coated HDG are at $820/mt CFR Gdynia for October shipment, whereas Polish buyers' target price is heard to be at around $800/mt CFR. European buyers are turning towards local suppliers for their apparently limited needs. The preference for short lead times is also a very decisive factor in this situation.
Generally speaking, local demand is observed to be recovering in India. In comparison with previous weeks, buying activity is gradually increasing in line with strengthening demand. The weakness of international steel demand has caused the export volume to decline, thereby increasing the importance of offers to the domestic market for traders. The Indian Central Board of Excise and Customs' announcement that the Indian government has decreased the export tax rebate for steel products by 25-30 percent to be effective as of September 20 may be considered as providing impetus for Indian market players' focus on the domestic market rather than on the already weak international demand.
SteelOrbis has heard from market players that, considering that demand may strengthen further, flat steel prices in India are expected to increase in the long term in line with the melting down of inventories.