Following the hikes in local sales prices for the second time in the current month, Indian hot rolled coil (HRC) producers have kept insisting on higher export prices with their limited exportable surplus focused largely towards buyers in the European Union (EU), where higher CFR valuations are seen to be more acceptable than in Southeast Asia, SteelOrbis has learned.
According to traders and producing circles, ex-India HRC prices are at $730-750/mt FOB compared to the previous deal price level from India to the EU reported at $715-720/mt FOB last week. The level near to the higher end of the range ($745-750/mt FOB) corresponds to the tradable value and contracts for small tonnages to Europe, while the lower end of the range reflects some rare offers of Indian mills in Asia, where they do not have a focus on selling, but are still voicing offers in line with the current market conditions.
“Bids received from the EU regions have remained strong on persistent reports of shortage and the high price of flats in that market,” an official at an Indian producer said. “But Indian steel mills are seeing exports only as a secondary focus considering low export allocations and average inventory at not more than a 15-day production equivalent to exporters’ limited willingness to accept bids for higher volumes. At the same time, local prices and demand are surging, ensuring at least 15-20 percent net higher realizations from domestic sales even after the government has pulled out export incentive schemes,” he added.
Trades in Southeast Asian markets have remained limited as buyers in key markets like Vietnam are cautious about accepting higher CFR valuations above the $700/mt mark and are seeking offers around $680-690/mt on CFR basis, the sources said, prompting Indian steel mills to not push volumes to this region too aggressively.