The workable prices from Indian integrated steel mills for hot rolled coil (HRC) have largely stayed unchanged in the range of $505-515/mt FOB, but trading activity has been limited by lower bids received from the key markets in Asia, expectations of a further softening of ex-China prices, and continued cutbacks in export allocation by Indian producers, sources told SteelOrbis on Monday, September 21.
Traders and officials at exporting steel mills said that, while sellers have been keeping offers unchanged, buyers in key markets like Vietnam have been largely unwilling to conclude any significant volume transactions at above $520-535/mt on CFR basis, leading to a large number of offers failing to find a customer over the past week.
Indian steel mills have also not been willing to aggressively lower prices, having already decided to bring down exportable volumes for trading during the end of November and December onwards, as most producers are seeking to increase volumes in the local market where realizations were higher and demand has been going up among end-users.
Market sources said that, among the limited modest-volume trades concluded during the past week was a 12,000 mt deal concluded by an Odisha-based integrated steel mill at around $510/mt FOB reportedly with a Vietnam-based trading firm. A western Indian steel mill reported a deal for 20,000 mt at $510-512/mt with a trading firm in Asia, the sources said.
“Export incentive has fallen over the past month. Local producers have seen a significant drawdown in inventory levels riding on strong domestic sales. The local currency is strong against the US dollar above the INR 74 to the dollar mark. Government export incentives are being withdrawn. Hence, the strategy of producers to increase local sales and pull down export volume shipments,” an official at ArcelorMittal Nippon Steel Limited said, adding that these factors precluded any possibility of sellers aggressively pricing exports.