Indian integrated steel mills have maintained hot rolled coil (HRC) export prices at $510-520/mt FOB, in line with a week ago, but no exporter has entertained bids from buyers in view of the tight supply situation in the domestic market and the rising differential between stagnant export realizations and higher margins from local sales, sources told SteelOrbis on Monday, October 19.
Market sources in steel companies said that most steel mills are operating at maximum capacity utilizations levels and with low inventories and that there still is a steady tightening of supplies for merchant sales.
Production levels cannot be increased further in the short term and, in view of rising domestic demand, producers have been forced to drastically cut down on export allocations, which in any case have been offering low realizations both in terms of dollar prices as well as in realizations in the local currency which has been strong against the US dollar.
It has been learned that, while stray deals for December deliveries are still reported for only small tonnages, most integrated steel mills have halted January bookings and are not responding to bids.
Among the stray deals was a limited volume trade of 8,000 mt by an eastern Indian steel mill at $520/mt FOB for December shipment, market sources said.
“Export transactions have almost disappeared from the market. There is no volume available for exports at current offer levels which are unattractive for producers at a time when there are high margins from local sales and strong demand,” an official at Jindal Steel and Power Limited (JSPL) said.
“We are already committed to reduce exports progressively over the current and next quarters and focus entirely on meeting local demand as advised by the government too,” he added.