Large Indian steel mills have becoming aggressive in cutting their hot rolled coil (HRC) prices during the past week, faced with unprecedented unsold stocks and the slowest movement of material in the local market recently, traders said on Monday, September 16.
“The fact that large steel mills have been lowering export offers and topping this up with discounts at a time when margins are also under strain from the appreciating rupee indicates the pressures on these steel mills to control rising inventory,” a Mumbai-based trader said.
Indian HRC export offers have been lowered by $5-10/mt to the range of $430-435/mt FOB, with reports in the market suggesting that at least two steel mills have offered additional discounts of $5-10/mt to conclude deals.
According to market reports, two large western India-based steel mills have successfully concluded contracts for end-October delivery to Vietnam for an aggregate volume of 100,000 mt at the lower end at $430/mt FOB of the price range, which is equivalent to $450-455/mt CFR, according to SteelOrbis’ calculations.
Market sources said that two steel majors, Tata Steel and JSW Limited, submitted offers to EU-based buyers at $435/mt FOB but, with a volume discount of around $10/mt on FOB prices. The sources said that price negotiations based on volumes are still ongoing. However, some volumes have been already traded at about $425/mt FOB, which corresponds to $455-460/mt CFR southern Europe.
