Ex-India hot rolled coil (HRC) trading activity has lapsed into silence over the past week, with buyers in the Middle East pausing negotiations as demand weakens and, with prices expected to settle at lower levels, customers in Asia are also asking for discounts. Local mills for their part have been hamstrung in pushing overseas sales, adjusting their prices in the face of rising production costs, SteelOrbis learned from trade and industry circles on Tuesday, June 2.
Ex-India HRC prices have been officially maintained at $550-560/mt FOB but rare deals, mainly to Asian destinations, have been done at near $545/mt FOB or slightly above.
In particular, sales from India to Vietnam were done at $575-580/mt CFR a week ago, but the new indications are already at $560-565/mt CFR, which translates to $530-535/mt FOB. “The monsoon season will start soon and hence demand will gradually go down after mid-June… Some mills may be willing to go down to get orders from Vietnam at $560-565/mt CFR,” an Indian trader noted.
According to the sources, demand in the Gulf Cooperation Council (GCC) region is seen to be low to moderate and buyers have been stalling deals, anticipating the weakness seen in markets like China to lower prices further and increase buying options.
Some bids against Indian offers in the Middle East were heard at lows of $510-520/mt FOB, but sellers pulled back from negotiations as the levels were not viable against the rising cost of local production, the sources added. Some offers from India to the GCC from large mills are far above that - at $600-610/mt CFR.
“The market in the Middle East is showing a wide gap between buyers’ and sellers’ expectations. Buyers are seeing a weakening of prices round the corner, while sellers are coping with costs and lacking the leverage to face competition,” a source at a mill said.
“Europe is not on the sellers’ radar as tariff quotas are not available. Also, even though the price is stable, competitive offers and sufficient stocks at distributors are keeping import interest low,” he added. The latest offers from India to Europe were stable at $600-610/mt FOB.
But by the end of the week, a deal at around $650/mt CFR has been reported in the market, which translates to $580-590/mt FOB depending on the freight.
The SteelOrbis reference price for ex-India HRC has been corrected down by $10/mt over the week to $510-590/mt FOB.
