Indian hot rolled coil (HRC) exporters have been forced to lower prices again to push sales in the face of rising competition from ex-China material and the softening of prices in the EU region, SteelOrbis has learned from trade and industry circles.
Ex-India HRC prices have been at $1,010-1,150/mt FOB, with the midpoint at $1,080/mt FOB, down by $30/mt on average from last week. Most deals to Europe have been done at near the higher end of the range indicating that this is still the highest payable market for Indian sellers even after some price decline. Last week, SteelOrbis reported small sales at closer to $1,200/mt FOB to Europe.
“The entry of China offering large tonnages at competitive rates has changed dynamics in the key EU and Gulf regions. Indian mills are also booking tonnages although only after dropping prices,” an official at a private mill said.
“Hyper export realizations are giving way to a more sober mood among sellers. Sluggish domestic demand is prompting mills to book larger export tonnages after reducing prices. Buyers in the EU are also showing signs of resistance and are unwilling to accept regular increase in prices,” he said.
Sources said that an eastern India-based mill reported a trade with a UK-based buyer at around $1,180/mt FOB, for June shipment, but most trades subsequently later in the week have all been heard at lower levels.
A contract for ex-India HRC to Italy for 3,000-5,000 mt was heard at $1,270/mt CFR, translating to around $1,150/mt FOB or below. The contract has been signed just recently and for late May shipment.
Another mill located in the west has concluded a trade for 3,000 mt for June also to Europe at $1,115-1,120/mt FOB and another tonnage of 5,000 mt with a buyer in Italy at $1,120-1,130/mt FOB, sources said.
“The euphoria over realizations from exports is over, at least for now. But export sales realizations are still higher than local sales, which are showing signs of waning. Hence, high export allocations by mills for the April-June quarter will remain unchanged,” a source at Steel Authority of India Limited (SAIL) said.
“Buying interest from the Gulf has been very low. But we expect it to revive soon after Ramadan and this can provide a thrust for the next round of price improvement,” the source said.
In Turkey, offers for ex-India HRC have been reported at $1,120-1,130/mt CFR for June shipment, but the tradable level should be at $1,100/mt CFR or below to attract any buyers as Chinese prices are remaining very competitive.
