Large Indian exporting steel mills have kept hot rolled coil (HRC) offers stable during the past week but trades have slackened with exporters easing off from pushing volumes overseas following hikes in base prices and good realizations from sales in local markets, sources told SteelOrbis on Monday, January 20.
Market sources said that HRC prices were maintained at $495-505/mt FOB but only deals for limited volumes were concluded during the past week in key markets like Vietnam and Malaysia, with buyers cautious about concluding large-volume contracts.
State-run Steel Authority of India Limited (SAIL) has floated an export tender for 10,000 mt of HRC, with bids expected to close within the next fortnight, sources said.
A western India-based steel mill has concluded a deal for 6,000 mt of HRC for early March delivery with buyers in Malaysia at $496/mt FOB, the sources said.
An eastern India-based steel mill has concluded a contract for 8,000 mt of HRC for end-of-February delivery with buyers in Vietnam at $495/mt FOB.
“There is a slight cautiousness among buyers as regards concluding large-volume contracts. This is largely due to reports that Chinese steel mills’ January production HRC is going to be at least five percent higher than December as these steel mills have lowered long product output and increased flat product production and this is likely to dampen export offers,” a manager at an eastern India-based steel mill said.
“The Chinese Lunar New Year ahead has also led to a slump in trading activity in key export markets for ex-India HRC as buyers anticipate offers will soften. Indian steel mills have also significantly lowered inventories and they are getting strong realizations from domestic sales after mills increased base prices by INR 2,000/mt ($28/mt) over the past two months. The Indian rupee being stable at around INR 71 to the US dollar also does not offer incremental margin benefits from exports in the short term,” he added.