Indian large integrated steel mills have lowered their hot rolled coil (HRC) export prices during the past week, in reaction to the softening of bids from China. Producers have been aiming to push volumes overseas, a key to inventory management nowadays given the ongoing slowness of domestic sales, SteelOrbis has learned.
According to market sources, ex-India HRC export prices are in the range of $360-380/mt FOB, compared to $370-380/mt FOB a week ago.
A contract with a Chinese buyer was done at $385-390/mt CFR last week, which corresponds to $365-370/mt FOB. The volume was not high, sources have said. Another transaction was closer to $360/mt FOB ($380/mt CFR China).
The latest sales to Vietnam have been heard at $390-395/mt CFR ($370-375/mt FOB), but the total export volume in contracts did not exceed 30,000 mt last week.
In the European market, offers for Indian coils have been mostly at $380/mt FOB (about €375-380/mt CFR).
“We have to price our exports very strategically and dynamically as shipping volumes overseas is key to beat the lack of domestic demand. As Chinese [local] HRC prices soften we too have to be very competitive and work with thinner margins to be able to maintain our domestic operations even at reduced capacities,” a manager at one Indian steel mill said.
However, at least two market intermediaries said that buyers in key destinations like China and Vietnam have paused as regards concluding large deals, at least for a short period, while expecting the softening of ex-China prices to impact markets across the region. Overseas buyers are also aware of the pressure on Indian integrated steel mills to conclude export deals and have been aggressive in seeking lower prices or volume discounts. This will gain momentum over the coming week and it is to be seen how Indian exporters price their tonnages to trigger an increase in transaction volumes, the traders said.
