Indian integrated steel mills have largely kept their hot rolled coil (HRC) prices stable during the past week in the range of $445-455/mt FOB to be able to conclude bookings of higher tonnages amid brisk buying in the key south Asian and Chinese markets and moderate-sized deals with African buyers, traders said on Monday, August 3.
Renewed buying interest has been noticeable among Chinese importers in the wake of the rebound in both demand and prices in China, and Indian HRC exporters have been keeping ex-India prices stable to gain a competitive advantage in order to push higher tonnages overseas.
However, the traders pointed out that on average in contrast to the previous week most of the deals concluded have been at the lower end of the price range, indicating that exporters are focusing on increasing volumes in supply contracts rather than increasing per ton margin realizations in foreign currency.
Market sources said that an eastern India-based steel mill with a plant in Odisha concluded a deal for an estimated tonnage of 45,000 mt with a China-based trading firm at a price reported in the market to be around $445-447/mt FOB. The same steel mill concluded a deal with a Singapore-based trading firm for an estimated volume of 30,000 mt at around $443-445/mt FOB, the sources said.
A Gujarat-based steel mill has reported a deal for around 40,000 mt with Chinese buyers for October shipment at a price of around $446-448/mt FOB, sources said.
A Maharashtra-based steel mill concluded a trade of 35,000 mt at around $445-448/mt FOB for October delivery and, although the exporter did not disclose the buyer’s identity, the market speculated that it is based in Vietnam.
At least two market intermediaries said that the buying interest from countries in Africa which emerged in earlier weeks has been sustained and, although trades were for lower volumes than in other key markets, the incremental export trades enabled Indian integrated steel mills to maintain export prices and focus on volume shipments.
They said that a western India-based steel mill negotiated a direct export deal with a Nigeria-based end-user for 20,000 mt at around $450-453/mt FOB.
“It is seen that buyers particularly from China are seeking price stability and hence local exporters have been easing off their aggressive pricing and instead maintaining price competitiveness in China,” an official at the mill said.
“Hence even though integrated steel mills are increasing local base prices steadily over past weeks, export prices will have to remain at discounted levels over local prices if exporting steel mills are to ensure higher volume dispatches overseas,” he added.