In the first week of the year, Indian HRC suppliers have started to make small upward price attempts in key export destinations such as Vietnam and the Middle East. However, these increases have so far failed to elicit any response, as buyers remain cautious amid the prevailing market uncertainties. Meanwhile, export price sentiment has also improved, supported by faster-rising domestic prices in India and tighter supply conditions.
More specifically, ex-India HRC prices have increased by $5/mt over the past week reaching $470-475/mt FOB in the Middle East, which translates to around $495-500/mt CFR UAE, up by $5/mt week on week. “The last Indian deal was heard for around 30,000 mt of HRC at $490-495/mt CFR UAE, with shipment expected shortly. Meanwhile, a number of Indian suppliers have started negotiating new deals at around $500/mt CFR as they are all aiming to increase prices slightly, though most bids are still voiced at $490/mt CFR,” an Indian trader told SteelOrbis.
Meanwhile, following several deals for around 60,000 mt signed at $477-482/mt CFR Vietnam last week, this week offers for ex-India HRC in Vietnam have been voiced at $485-490/mt CFR levels, up by $5-10/mt CFR week on week, which translates to around $465-470/mt FOB. “Some Indian offers have still been reported at $483/mt CFR, but most market insiders are already reporting higher offers at $490/mt CFR or slightly below, as Indian mills aim to slightly increase their offers in the main trade destinations,” a Vietnamese trader told SteelOrbis, adding, “A number of Chinese traders are considering selling Indian material in Vietnam instead of Chinese material, due to the disappearance of cheap non-VAT offers in China.”
In the meantime, no offers for ex-India HRC have been reported in Europe due to the holiday lull in the region, while the latest offers were reported at $520-525/mt FOB last week. Furthermore, according to sources, no activity has been reported from Europe, also due to uncertainties stemming from the now-effective carbon tax on imports (CBAM). Notably, sources said that no large mill is willing to cut export prices and sacrifice margins at a time when the local flat products market is gradually moving into a tight supply situation and sales margins are steadily improving.
As a result, the SteelOrbis reference price for ex-India SAE1006 HRC has moved to $465-520/mt FOB, up by $10/mt on the lower end of the range given higher offers reported in Vietnam, while the higher end corresponds to indicative offers in Europe.
“Prices are showing signs of improving in key destinations, but buyers are still cautious. But domestic prices are increasing faster, and supplies are tightening. So, large mills are not pushing overseas sales. There is a good market locally both in volumes and prices,” an official associated with Tata Steel Limited told SteelOrbis.
“We do not think mills will have significant export volumes in the last quarter of the Indian fiscal year (January-March), as more material is likely to be directed toward the domestic market. In addition, it will take time to assess the full impact of the carbon tax in Europe and how buyers will react once the new tariff quotas come into effect,” he added.