India’s large integrated steel mills have aggressively cut their hot rolled coil (HRC) export prices further during the past week, taking advantage of the sustained weakness of the local currency to push volumes in the export market and check mounting inventories even in the face of logistical challenges, SteelOrbis has been informed on March 30.
Market sources said that large steel mills from India have lowered export prices to $380-405/mt FOB in deals to Vietnam, China and the UAE, down sharply by $50-55/mt compared to March 23.
The sources said that producers are not so much concerned about lower margin realizations from exports, but have been more focused on reducing inventories at the close of the current fiscal year as local HRC demand is at its lowest level.
The sources said that a western India-based steel mill concluded an export contract for early May delivery for 40,000 mt with a buyer in Vietnam at $407/mt CFR (about $390/mt FOB, taking into account the freight for large volumes declines to below $20/mt), sources confirmed.
At least two other traders reported a contract for an aggregate tonnage of 35,000 mt to Asia at about $5/mt lower - so at $400-405/mt CFR (about $385/mt FOB). Vietnamese traders confirmed that this tonnage was sold to a re-roller in the south of Vietnam.
Moreover, there are reports in the market that negotiations with Indian sellers have already been at $395-400/mt CFR Vietnam (about $380/mt FOB).
Another contract for a big tonnage of ex-India HRC from a mill to China has been rumored at $400-405/mt CFR, though this has not been confirmed by the time of publication. Moreover, there has been information that earlier a small tonnage of Indian HRC changed hands at $410/mt CFR China for April delivery.
In the UAE, about 10,000-20,000 mt of ex-India HRC have been traded at $425-430/mt CFR (about $405/mt FOB). As a result, total sales of 90,000 mt of Indian HRC have been confirmed in the export market with some disclosed without an exact volume.
However, most market participants said that the biggest challenge for exporters is the logistics of transporting to ports and securing a loading window at ports since the Indian government has empowered port authorities to declare force majeure in view of the spread of Covid-19.
The sources said that, while several private ports had closed operations, since most of the HRC exporters are based in the western region, they have been shifting outward shipments to minor ports along the west coast, which are facing relatively less dislocation and so early May deliveries could be completed.