Ex-India hot rolled coil (HRC) prices have moved down this week reacting to higher supplies at cheaper price from China. However, local mills still failed to attract buyers in face of rising competition in Asia and the Middle East and slow consumption coupled with safeguard quota issue in Europe.
Specifically, ex-India HRC prices have settled at $570-600/mt FOB, against $570-610/mt FOB at the end of last week and compared to $580-650/mt FOB at the beginning of last week. By the end of last week, talks about a few deals for 20,000-30,000 mt of ex-India HRC signed at €605/mt CFR southern Europe have been circulating in the market, which translates to around $660/mt CFR, or around $610/mt FOB, while this week most offers have been assessed at already $600/mt FOB level. “Prices in Europe were heard to be declining and hence interest in imports is low despite Indian mills dropping offers more significantly in the market to push trades and distributors not seen to be responding due to safeguard quota issue”, a market insider told SteelOrbis.
Furthermore, a few orders for Indian origin materials have been reported in the Middle East at around $600/mt CFR, or around $570/mt FOB, however, most ex-India HRC offers have been still estimated at around $620/mt CFR UAE this week.
Sources said that ex-India HRC prices were cut for all main destinations including Asia, the Gulf region and Europe, but the cuts were not sufficient to meet slower buyers’ bids, with customers in Vietnam and the Middle East expecting more discounts as more offers flood in from China. In particular, workable prices for ex-China HRC have been voiced at $520-530/mt FOB, making impossible for Indian sellers to compete offering the lowest at $570/mt FOB.
“There is too much volume chasing too few buyers in most markets. Every buyer is expecting price falls to sustain and quoting bids not viable for local mills. We are keeping close watch on exports but not sell at unviable prices. In Europe we are not interested in deals at anything around $610/mt FOB,” a source in Tata Steel Limited said.
“For most mills, any residual export allocations will still find better realizations in local market. We will review markets once we commence export allocation planning for the start of next fiscal,” another source said.
