Most ex-India hot rolled coil (HRC) prices have kept their prices largely stable with mills adopting caution over the fall in trade and achievable prices in the Middle East and Vietnam. However, since demand from the EU region, where Indian sellers have been focusing for months, is not enough, lower ex-India offers have been heard in the Gulf region this week, SteelOrbis has learned from trade and industry circles.
Sources said that ex-India HRC prices have been settled at $720-770/mt FOB, versus $740-770/mt FOB at the end of last week, with the lower end of the price range applicable for offers in the Middle East, the UAE in particular, at around $750/mt CFR, where buyers were heard to be shifting to cheaper alternatives like ex-China. “The difference between Indian offers to Europe and to the Middle East is very big, but the bearishness, which is mounting among Chinese suppliers, leaves no choice to Indian exporters, who plan to expand their sales not only in Europe,” a market insider said. However, no deals have been reported for ex-India materials in the Middle East so far, as Indian prices are not workable in the market given more attractive ex-China offers at around $680/mt CFR, according to sources.
In the meantime, the higher end of the range corresponds to ex-India HRC offers in the EU, which have been voiced at around $830-840/mt CFR both in northern and southern Europe, the same as last week. According to sources, following several big deals for ex-India HRC in the region last week at $820-830/mt CFR, new bookings for above 30,000 mt in total have been reported at $830-840/mt CFR. Notably, although Indian mills have been reporting strong continued buying interest from the EU and sellers are expecting to push up offers in the region further, the demand in Europe is not enough to absorb all the supply, while a big number of European buyers refrain from ex-India purchases due to the long lead time.
“Divergent trends are emerging across global markets. Sentiments and prices are weakening in Asia led by China. The EU continues to remain the focus of Indian sellers considering their success in getting better realizations and higher tonnage bookings from the region,” a steel sector analyst with a Mumbai-based financial advisory firm said.
“The question is whether the Asian contagion will spread wider. Activity in the Middle East has moved down with the start of Ramadan and buyers seeking cheaper alternatives that are available from China, for example. For Indian mills, this has been offset by bookings emerging from the EU. But for how long? This remains the uncertainty,” he added.