Indian hot rolled coil (HRC) export activity has become moribund, with sellers maintaining offer prices at higher levels and offering still very limited volumes. Offers for European buyers have increased as customers are expected to resume purchases soon, while the tradable level for the Asian market has been much lower.
Limited deals concluded from India to Asia at lower levels were termed as “nominal and only to maintain a market presence in the Southeast Asian region, while buyers in the European Union are still to return to active international trading, while local producers are under no compulsion to increase export allocations for the rest of the current fiscal year,” a source told SteelOrbis.
The price range for ex-India HRC, which was already very wide, has widened further to $695-810/mt FOB with the midpoint at $752.5/mt FOB, up $7.5/mt from last week. The lower end of the range corresponds to the latest tradable value for Vietnam, while the price at $810/mt FOB is heard to be the minimum targeted level of Indian mills in Europe.
“We are seeing the ex-China HRC volume offering increase in the Asian region, putting pressures on valuations. But we think that this will be short-lived as finished flat products are firmly on an uptrend in every global market. We will not be rushed into committing export trades unless prices are viable for us,” an official at an Indian mill said. “Local HRC prices have significant headroom for an increase. The Indian rupee is performing strong above INR 73 to the US dollar. Both these are strong disincentives to increase our export allocations for the rest of the fiscal year or to become more aggressive in export markets,” he added.
Sources said that, while offers are at around $700/mt FOB to Asia, most buyers in Asian markets have been refusing to buy at such a level. One deal was heard for 20,000 mt of SAE1006 HRC at $720/mt CFR Vietnam a week ago, which corresponds to $695/mt on FOB basis or slightly above. Also, there have been reports of very small bookings to Asia at $690/mt CFR and below, but this has not been confirmed by the time of publication.