Indian integrated steel mills have paused their attempts to increase hot rolled coil (HRC) export prices in the past week in the wake of rising tension in Sino-India relations and signs of slowing demand from Vietnam.
Market sources said that ex-India HRC prices have remained in the range of $420-425/mt FOB and most sizable deals to Vietnam have been heard at the higher end of the range.
Vietnam is still the main sales destination with most deals closed at $445/mt CFR over the past week, with the freight assessed at $20/mt or slightly below. As SteelOrbis reported earlier, at least 80,000 mt of Indian SAE1006 HRC have been traded at $445/mt CFR, while one small lot was traded at $448/mt CFR Vietnam over the past week. But for now prices have stopped rising as customers are evaluating domestic offers and the situation with demand. Ho Chi Minh City and the whole southern part of Vietnam have been affected by rainy and stormy weather with flooding becoming serious.
The outlook for the Chinese market is also not very bright. Sources have reported that there have been some negotiations with Chinese traders at $415-420/mt FOB and some deals have been concluded, though this information has not been confirmed by the buyers’ side for now.
“There is no official government policy against trading with China. But signals are very clear and it is well known that the Indian government is working to increase duties on imports from China on a host of products. This gives rise to risks of retaliatory measures from China too. Hence, the trade environment with a key market is entering unknown territory,” an official at a private steel mill said. “Our buyers are still in touch with us and trades have not been impacted until now, but buyers are expressing anxiety over how relations between the two large Asian economies can be impacted in the coming days,” he added.
Offers for Indian HRC to Europe have been at $440/mt CFR or about $410-415/mt FOB, but demand has been low at this destination, and prices have not been competitive. The same situation has been seen for Turkey.
