Indian hot rolled coil (HRC) exporters are waiting for some price improvement later in June, even though demand in key markets has remained low and Asian buyers, in particular, are cautious and still assessing conditions and trends before committing deals, SteelOrbis has learned from trade and industry circles. However, Indian mills may take a pause and reject sales at low price levels as they have managed to fill their order books owing to sales to alternative destinations like Turkey over the past week.
Ex-India HRC reference price range, based on latest deals and tradable levels, is at $970-990/mt FOB with most of the trades at the lower end of the range, which is $10/mt below the level a week ago at $980-1,000/mt FOB.
Since early this month, a number of Indian mills have been focused on sales of HRC to Turkey, as they faced weak interest in Vietnam and the new quota for sales to Europe was not opened yet. The latest deals for Indian SAE1006 HRC to Turkey were done at $1,020-1,030/mt CFR or about $970-980/mt FOB. From late April until the end of last week, a little over 100,000 mt of Indian coils were booked in total to Turkey, according to market sources.
Mills have been less active in offering HRC to Turkey early this week after a number of deals earlier and rare offers have been reported at $1,065-1,070/mt CFR for late July-August shipment.
According to the sources, buyers in key markets like Vietnam are still extremely cautious and uncertain of the short-term price and demand trends and are keeping a close watch on the Covid-19 situation that has become a cause for concern in that country. A contract for an Indian position cargo was reported at $975/mt CFR last week, but this price has not been included in the SteelOrbis assessment as back-to-back offers from Indian mills have been at $1,050/mt CFR ($1,010/mt FOB) with only $10-20/mt discounts possible.
“For most Asian buyers, a valuation of $1000/mt FOB or above is not acceptable. This is also holding back local sellers from pushing through deals. Local sales realizations are averaging $970-990/mt and, unless overseas markets begin to accept valuations above the $1,000/mt mark, Indian exporters will not push through significant volume deals,” an official with ArcelorMittal Nippon Steel (AMNS) said.
“Indian exporters are keeping a close watch on the EU market. Buyers from this market are expected to become more active from this month onwards and that is where we are expecting support for the improvement of overseas realizations,” he added.
Sources said that an Odisha-based integrated steel mill has reported a trade of a small volume to an Asian buyer at $990/mt FOB, while most other offers from other steel mills during the week failed to evoke any response from Asian buyers.