Indian hot rolled coil (HRC) export activity has lapsed into a lull during the past week due to a drop seen in Asia and weak sales to Europe, SteelOrbis learned from trade and industry circles.
Sources said that, with integrated steel mills close to hiking local base prices, the weak buying in the Asian region could prompt the mills to lower export allocations as sellers would be unwilling to push volumes overseas at large discounts to local prices.
Ex-India HRC prices have lost $30-40/mt over the past week, coming to $940-950/mt FOB, but, taking into account that most major buyers had cheaper alternative sources, demand for Indian coils has been weak.
Offers to Vietnam from big mills have declined to around $970-980/mt CFR, but most sellers were not offering to Southeast Asia as most bids have fallen to below $900/mt CFR.
At the same time, optimism over the EU market where Indian sellers were successful in securing higher realizations has been tempered by the fact that overall demand is not high and big mills have already sold enough volumes to cover the next quarter quota.
“We are noticing divergent buying sentiments across the EU region. Buyers from Italy and Spain are active but mostly in small-volume deals,” an official at a western Indian steel mill said.
“We learn that EU steel buyers have taken a very negative view of the recent decision to extend safeguard measures by three years with only a three percent increase in annual quota, against expectations that such safeguards would be extended for one year with a five percent rise in the annual quota, considering sustained tight supplies in the region. This is a possible reason for market activity from some EU countries slowing down even though prices remain high and supplies tight,” he added.
Offers for ex-India HRC to Europe were at $1,250/mt CFR for products over the future quota including 25 percent import tax, so about $1,000/mt CFR without duty.