Indian exports of hot rolled coil (HRC) have remained at minimal levels during the past week amid a widening of the difference between offer levels and the acceptable valuations of buyers in key destination markets, according to sources.
Exporting integrated steel mills in India are still saying that the tradable level for them is at $505-520/mt FOB depending on the destination, but to some outlets like Vietnam, for instance, most steelmakers have withdrawn offers, seeing they are not competitive. The tight supply situation and increasing local HRC prices have been the main reasons for the low export activity in India. Local producers are refusing to adjust export prices below the $500-505/mt FOB mark, the sources added.
At the same time, buyers in key markets like Vietnam have rejected any deals above $510-515/mt CFR, traders and sources among producers said.
Reflecting Indian integrated steel mills sharply reducing focus on overseas shipments, an official at Jindal Steel and Power Limited (JSPL) said, “We will be selling over 80 percent of our finished steel products in the local market as demand and realizations are reviving strongly.”
“Apart from realizations falling in dollar terms from export shipments, the rising value of the local currency against the US dollar now appreciating to a one-month high of INR 73 to the dollar and expected to continue to move up has further eroded margins from exports. We are completely out of flat product exports and limited overseas shipments are only for semis where margins are slightly better,” an official from Steel Authority of India Limited (SAIL) said.
Market sources said that among the marginal number of small-volume trades completed during the week was a deal concluded by an eastern India-based integrated steel mill for about 8,000 mt with an Asian buyer at a price reported at around $505/mt FOB for December delivery with sources pointing out that this was more in the nature of marking a presence in the overseas market.
In the UAE, the price for Indian HRC has been assessed at $525-535/mt CFR, which corresponds to around $500-505/mt FOB. One source reported that demand has been moderate.
In Europe, offers for Indian HRC can be at the same level as last week - at $520-525/mt FOB. But no new deals have been reported so far. Moreover, ex-Japan HRC has been available at almost the same level as ex-India on the CFR basis in Italy recently.