The situation for Indian HRC exports has not changed much after Indian mills returned from the festival holidays. In particular, ex-India HRC prices have been maintained at mainly ‘notional’ levels as no deals were workable amid the further widening of the gap with bids against the backdrop of a further worsening of bearish sentiments in Asia and the Gulf region given more aggressive offers from Chinese suppliers.
Sources said that ex-India HRC prices have remained unchanged at $550-570/mt FOB, while bids received from Asian buyers, from the Vietnamese in particular, have dropped to around $540/mt on CFR basis, compared to $560/mt CFR received a week ago, making deals virtually impossible.
According to market insiders, even buyers from the Gulf, who were keeping stray deals alive, were also retreating expecting the downturn to gain pace. The workable price in the Gulf is estimated at around $580/mt CFR and even below given aggressive offers coming from Chinese traders, down from $590/mt CFR a week ago, thus “no local Indian mill wants to negotiate at such low realizations at least for now,” a source at a private mill said.
In Europe, occasional offers for ex-India HRC have been reported at as low as €620/mt CFR Italy, which translates to around $550-560/mt FOB. However, although this level is considered to be rather competitive in the EU, no deals have been reported, given extremely slow demand due to overstocking in the region.
“Our own export allocations for the current quarter are down to the minimum required to maintain a presence with our long-term customers in key overseas markets. We are looking at just shipping minor volumes overseas even at negative margins for customer relationship management,” the source added.
“Indian mills are expected to announce their offers at lower levels for the overseas markets considering the global downturn. However, we are still waiting for November local pricing from Indian mills to better understand the situation,” a market insider told SteelOrbis.