Indian mills have continued to focus on small-volume deals in the Gulf and African regions mostly, even though prices have showed signs of improvement in the Asian market. Most offers from India were still too high for buyers there in the absence of a significant demand revival in a key market like Vietnam, SteelOrbis has learned from trade and industry circles.
Small-volume deals for ex-India HRC have been at $820-830/mt FOB, on a par with the previous week. This level was acceptable to buyers in the Gulf and Africa, but customers in Asia including Vietnam were reported to be seeking valuations in the range of $820-840/mt on CFR basis, slightly higher than $800-810/mt CFR being sought a week ago, but still not workable for most Indian mills.
Only one contract at around $835/mt CFR for ex-India HRC has been rumoured to Vietnam over the past week, but most sources have not confirmed this.
According to the sources, even though volumes in the Gulf are always low, slightly higher ex-India prices compared to ex-China HRC were more acceptable to buyers as sellers were confirming firm February deliveries in contrast to uncertain ex-China deliveries owing to the long vessel turnaround at Chinese ports and stricter quarantine rules.
Sources said that a western India-based steel mill concluded a deal for 8,000 mt with a UAE-based buyer, a second supply contract over the past two weeks at a price of $820/mt FOB for February shipment.
The same exclusive flat product supplier was also heard to have confirmed a supply contract for 10,000 mt with a buyer in Egypt at around $825-830/mt FOB, the sources said.
“Destinations of the Gulf and Africa offer limited opportunities in terms of volumes. At a time when movement of stocks and demand are slowing down in the local market, Indian HRC exports are insignificant in the absence of shipments to Asia,” a Mumbai-based ferrous, non-ferrous trader said.
“In Asia, the acceptable import price is improving. But it is still some distance from the workable prices of Indian sellers as mills are still faced with margin pressures from the rising costs of imported raw material. Hence, Indian mills are unable to match aggressive price offers in markets like Vietnam,” he added.