In a sharp reversal of brisk activity seen earlier in the month, Indian hot rolled coil (HRC) exports lapsed into moribund conditions on demand recession in the key Southeast Asian region, a lack of import tariff quotas in the EU and slow activity in the Middle East, SteelOrbis learned from trade and industry circles.
Indian integrated steel mills mostly held prices at $870-890/mt FOB over the past week, while one seller voiced a lower export price level at $850-860/mt FOB.
Demand for imported material in key markets like Vietnam is seen to be sinking in response to the rise in pandemic wave across several Asian countries.
Industry circles pointed out that aggregate trades concluded during the past week by local integrated steel mills will not exceed 15,000 mt compared to high volumes booked for exports a week ago reported at level of 100,000-120,000 mt.
“It is difficult to assess whether it’s a correction or demand recession setting in across key export markets. At least in the Asian region, risk appears of next wave of the pandemic, impacting sentiments among importers. Under this situation headwinds are emerging for Indian HRC export prices,” a steel sector analyst from a Mumbai financial advisory firm said.
“Indian HRC exports are competitive in the strong market conditions. But in a falling market, Indian steel mills have limited leverage to adjust pricing accordingly owing to higher cost of production and higher capital costs,” he added.
According to sources among the stray deals heard in the market was one nominal volume trade by an eastern India based steel mill to Asia at $850-860/mt FOB, which corresponds to $910/mt CFR Vietnam. But some sources said that in this deal, SS400 HRC was traded, not rerolling grade SAE1006, but this could not be confirmed by the time of publication.
Most large Indian producers are asking for $925-930/mt CFR in Vietnam, which is in line with the previous deals, concluded in the middle of the month.