Indian integrated steel mills have continued to aggressively increase hot rolled coil (HRC) export prices during the past week, though demand from China and Vietnam has started to slacken after the recent hike, SteelOrbis has learned.
Market sources said that ex-India HRC offer prices have continued to consolidate at higher levels in the range of $420-430/mt FOB, while deals have been done at and below the end of the price range. Nevertheless, this signals that Indian suppliers have managed to increase realization prices as contracts were mostly at $395-410/mt FOB in the earlier week. The sources said that the upside potential is somewhat limited because of competition with Turkey and some Russian suppliers, while a number of customers have decided to take a wait-and-see position.
Over the past week, more than 100,000 mt of Indian HRC have been traded to Vietnam at $427/mt CFR, $430/mt CFR, $432/mt CFR and $435/mt CFR, according to SteelOrbis’ information, while the volumes in the latest two contracts at higher prices have been for smaller volumes. These deal prices translate to $412-420/mt FOB.
Early last week, a cargo of Indian coils was traded to China at $428/mt CFR.
Indian HRC exporters have said that they see the workable price level in the Asian region at $428-435/mt CFR at the moment.
The sources said that Steel Authority of India Limited (SAIL), a relatively new player in flat product exports, has received a high bid for 25,000 mt of thinner gauge HRC at $428/mt FOB for August shipment. But this price level has been assessed by most end-users and traders as being too high for the market now and the deal has not been confirmed by the time of publication.
The emergence of modest volume buying interest from the Gulf region has also supported Indian steel mills in successfully increasing export prices. Market sources said that a western India-based steel mill has concluded an August shipment contract for 24,000 mt ex-India HRC with a Dubai-based trading firm at a price reported to be above $420/mt CFR.
“If demand for imports in China remains high and if the Indian rupee remains weak against the dollar at current levels of INR 75.50, this will support Indian integrated steel mills as they are increasing capacity utilizations to above 80 percent for the first time since the lockdown was announced in March,” an official at an eastern India steel company said.