Indian hot rolled coil (HRC) export activity has largely remained inactive amid a combination of factors such as very low export allocations remaining at mills, which are uncertain over whether intentions to push up prices will be successful in the wake of rapid changes in the global trade environment after the Russian invasion of Ukraine, SteelOrbis has learned from trade and industry circles.
Sources said that ex-India HRC price have remained largely unchanged at $860-870/mt FOB, but local mills’ short-term goal of pushing up prices to levels of $880-890/mt FOB or much higher in some markets is now threatened by Russia’s military adventurism.
“Mills are not offering currently because of a lack of allocation and given uncertainties due to the war such as freight costs, energy prices and steel prices,” a large Indian mill said.
But by the end of this week, some deals for ex-India HRC are expected to Europe as, with the recent critical shortage of slabs and the stoppage of HRC sales from Russia, the market will look for any available alternatives. New deals are expected at $1,050/mt CFR southern Europe or even above, according to sources.
Several source in trade circles and at private mills pointed out that, though conventional analysis indicates prices will see increase across geographies with mills in Ukraine out of the market, but, on the contrary, a prolonged Russian invasion, and widespread death and destruction, risks an overall demand recession setting in and disruptions to global trade and so the higher price expectations of local mills could be illusory.
Hence, exporters are preferring to wait and watch the direction of the rapid changes in global trade and economies, and the current low exportable volumes at mills will give them time to make assessments of the markets, they said.
“There are too many moving parts for local mills to assess in their bid to seek higher prices. The mills in recent weeks have been attempting to push higher volumes in the EU and the MENA region to offset price resistance in Asia,” an official at a private mill said.
“But these markets will be more impacted by any escalation of the Russian war on Ukraine and Russia’s endgame is not clear either. Exporters here have limited risk assessment capabilities and hence are largely staying away from committing deals right now. The financial markets too are nervous and payment transactions are risky,” the official said.
The only relatively small-volume trade that could be confirmed in the market was by an eastern region-based integrated Indian steel mill at a price of around $865-870/mt FOB.
