Having successfully pushed up ex-India hot rolled coil (HRC) prices, mills continued to pull back offers and refrained from concluding deals planning to float new offers next month further increasing prices, SteelOrbis learned from trade and industry circles.
Indian mills pushed SAE1006 HRC prices to $595-610/mt FOB with deals in this range, higher than the last week’s reference price of $575-605/mt FOB. While last week a number of producers have been targeting $600/mt FOB, at the moment at least two producers withdrew large volume spot offers declining, bids at around $610/mt FOB and expected to float new offers and speculated to be at least at the $630/mt FOB level.
Mills have started booking for March shipment over the past week and with ex-China exports falling in wake of fresh wave of Covid-19, there is a lot of optimism over achieving higher realizations in key destinations of the Gulf and Southeast Asia and hence number of sellers are revising offers.
Sources said that a Gujarat based mill reported a trade for 25,000 mt for March shipment HRC to a Middle East-based trading firm at $598/mt FOB.
An eastern based integrated mill reported a deal for 30,000 mt to the UAE at $605/mt FOB, or around $640/mt CFR, according to a number of sources. This level is in line with the offers announced since early last week, but the previous sale at this destination was at $610-620/mt CFR earlier in December.
A lower volume tonnage of 8,000 mt for delivery to an end user in Nigeria was sold at $595/mt FOB, the sources said.
In addition, a sale for 15,000 mt has been rumored with a Singapore-based trading firm at $600/mt FOB. This level could translate to around $620/mt CFR Vietnam, but a number of Indian mills’ direct offers to Vietnam are at $630-640/mt CFR.
“Mills have low export allocations for the last quarter of current fiscal and hence leveraging higher prices on back of improved demand in key destinations. Lower number of ex-China offers is helping sellers to hike prices,” an official with a private mill said.
“However, the uptrend in achievable price in overseas sales needs to be assessed with caution. Sentiments are weak in China and may have a contagion effect across markets. The EU demand is uncertain amid energy costs. Hence, while Indian mills will push for higher prices in the short term, they are unlikely to increase export allocations significantly until consolidation at higher levels is more definitive,” he said.