A number of Indian integrated steel mills have suspended submitting hot rolled coil (HRC) export offers to Chinese buyers after several of the latter expressed concerns over receiving deliveries of already-contracted supply deals amid rising Sino-Indian tensions, sources said on Monday, July 6. Moreover, the workable price level in Vietnam has also declined over the past week.
Only a very limited number of deals were concluded early last week, but thereafter several exporting integrated steel mills from India suspended submitting offers as Chinese buyers reportedly expressed concerns over receiving consignments at both Indian and Chinese ports.
Though nothing has been officially confirmed by either country, tensions in Sino-Indian relations, the failure of any breakthrough in ongoing diplomatic and military-level talks regarding disengagement of armed forces along the border, both Indian and Chinese authorities are reportedly increasing scrutiny of consignments at ports at exporting and importing countries.
An official at an Indian state-owned steel mill said that, while there is no official directive from the Indian government, there has been increased scrutiny of inward and outbound consignments at ports. Even steel companies are not officially stating that submission of export offers has been suspended but, considering the ‘extremely sensitive situation in the India-China trading environment’, exporting steel mills are cautiously withdrawing from publicly giving details of trade deals.
Sources said that in the first few days of the past week exporting steel mills largely maintained ex-India HRC export prices unchanged, but only limited volume trades were concluded. An Odisha-based steel mill was able to conclude a contract for 25,000 mt, much lower than tonnages booked in the previous week, at $410-412/mt FOB for September. This price level translates to about $432-435/mt CFR China.
The same steel mill also concluded a booking for 30,000 mt at the slightly higher price of $412-414/mt FOB to Vietnam, which is $438/mt CFR. But late last week a booking of 20,000 mt of Indian HRC was already concluded at $432/mt CFR Vietnam, sources reported on Monday, which corresponds to about $407/mt on FOB basis.
