Indian integrated steel mills have been increasing their hot rolled coil (HRC) export prices very carefully recently, facing buyers’ resistance and trying to maintain sizable sales volumes. Deals have been concluded with a slight price increase with buyers in Vietnam.
Market sources said that most deals have been concluded at $420-425/mt FOB, compared to $412-420/mt FOB a week before. Offers have mostly been voiced at $430/mt FOB or $5/mt below.
In the middle of the week ended on June 15, 20,000 mt of Indian HRC from one of the main Indian mills were sold at $438/mt CFR Vietnam, which translates to $420-423/mt FOB. But at least two the most recent deals were closed to Vietnam at $440-445/mt CFR or up to $425/mt FOB. One of the deals has been for 40,000 mt.
The tradable level for imported HRC has not increased in the Chinese market as sentiments have not been very bright due to lower futures prices and emerging concerns about a second wave of the pandemic after new Covid-19 cases were registered in Beijing. Buyers are still not willing to pay above $430/mt CFR ($415-420/mt FOB).
Tata Steel has concluded a supply contract from its Kalinganagar steel mill in Odisha at around $415-417/mt FOB for end-of-August shipment through Paradip Port with a buyer in China, although the total tonnage could not be confirmed by market sources.
Steel Authority of India Limited (SAIL), a relatively new entrant, traded 35,000 mt of HRC at $415/mt FOB.
“Indian exporters are aware of the risks of pushing up prices too high too fast. Buyers in key overseas markets are becoming price sensitive even though willing to book higher volumes if prices are competitive. Hence, it is natural for local integrated steel mills to prioritize pushing volumes at competitive prices to sustain overseas sales at a time when demand in the local market is unlikely to revive before the end of the second quarter,” a marketing official at Indian steel mill told SteelOrbis.