Over the past few weeks, Indian integrated steel mills were reported to be diverting hot rolled coil (HRC) export allocations entirely to the EU region, securing significantly higher realizations from buyers there who have been aggressively restocking, while almost vacating the Asian market. But in the EU HRC market, weaker sentiment has also started to emerge over the past week, signaling a possible slight price correction, sources have told SteelOrbis.
Ex-India reference prices according to SteelOrbis are at $745-795/mt FOB with a midpoint at $770/mt FOB, down by $5/mt on average from last week. The lower end of the range has remained stable and corresponds to some rare offers seen for alternative sales destinations apart from Europe. The higher end of the range has been lowered by $10/mt over the past week due to slight decline in the latest sales to the EU from India and the decrease seen in the tradable level in the whole market.
“The EU market has emerged as the strongest among all others for Indian steel mills. But at the same time, competition is rising too with a surfeit of offers from Asian suppliers as the EU is offering very good positive realizations for all exporting countries. The impact of softening of ex-China offers is greater in Asian markets at the moment, prompting more caution among buyers for high-priced offers,” an official at ArcelorMittal Nippon Steel said.
A low volume deal for 3,000-4,000 mt of Indian HRC has been reported at about $830-835/mt CFR to southern Europe over the past week, which corresponds to $795-800/mt FOB. In addition, another contract from integrated steel mills has been done at approximately $790-800/mt FOB.
Some sources said that since sentiment has weakened slightly over the past week the tradable price level in the next sales to Europe will hardly be above $790/mt FOB. According to some information received, the lower level has already been fixed, but this has not been confirmed by the time of publication.
Bids from Vietnam have not been workable for Indian exporters at all as buyers there were mainly purchasing from China at $670/mt CFR and below last week.
“Indian exporting mills are unwilling to conclude contracts unless realizations are strong. Asian markets are not attractive at the current acceptable valuations of buyers here, while Indian exporters are under no pressure to increase shipment volumes at lower realizations as export allocations will remain low at least during the last quarter amid reviving domestic demand,” a local source said.
