Indian hot rolled coil (HRC) exporters have still been facing a demand recession as buyers in the major sales destinations are either not purchasing anything at all or are waiting for a clear market picture first, as SteelOrbis has learned from trade and industry circles. Though Indian exporters were hoping to follow the uptrend seen in China, as for now increases have been only small and indicative.
Ex-India HRC prices have reached $575-590/mt FOB, with the lower end of the range up by $10/mt over the past week. With Europe being on holiday, for now India has been offering mainly to Vietnam and the Middle East. The small rise seen in ex-India prices over the past week corresponds mainly to the Asian market, where firmer offers and rare deals have been seen.
Around 10,000 mt of a mixed cargo of SS400 and SAE1006 HRC from a major Indian mill has been traded to Vietnam at $610/mt CFR, translating to $575/mt FOB. This level is higher than last week's indicative assessment at $600/mt CFR. But market sources do not see any firm rebound, at least for now. “Now prices are in a similar range,” a source said. In particular, offers to Vietnam have remained at $610-615/mt CFR or just slightly above for the moment.
The sources said that, though local HRC prices in China have been showing signs of hardening, this has not been impacting the Gulf market much, and buyers are deferring purchases. Offers from India to the UAE have been heard at $635-640/mt CFR, just slightly up from $630-640/mt CFR reported last week. Ex-China offers to the UAE have been higher than ex-India by at least $10/mt.
“Volumes of sales by local mills in the Asian region have taken a severe hit. Concluding deals in the Gulf markets has also become a challenge for exporters. We hear sellers from China having success in improving price realizations from overseas sales. But this is not true in the case of producers/sellers from other regions,” an official at a private mill said.
“Government steel mills have lowered export allocations to almost nil in the July-September quarter and will maintain such a stance in the next quarter too, according to industry reports we are getting. Private mills have reduced export allocations and may have to bring them down further even at the risk of increased inventory. Aggressive local sales are the only option as producers don’t have much pricing leverage,” he said.
