Fairly high allocations and inventories as well as low demand locally have continued to exert strong pressure on ex-India hot rolled coil prices. Even though some mills have not been so aggressive, traders have cut offers further and mills are unlikely to refrain from cutting prices if there are any firm bids, SteelOrbis learned from trade and industry circles on Tuesday, June 30.
The SteelOrbis reference price for ex-India HRC has settled at $505-580/mt FOB, where the lower end of the range has lost $10/mt over the past week. Buyers in key destinations were expecting a sharp correction in prices based on reports of key producing countries forcing higher overseas sales in reaction to weak domestic demand. This, coupled with more sellers becoming active in the Middle East, has caused buyers to defer deals until prices settle at a new bottom, the sources said.
The lowest prices for Indian HRC have been heard to Vietnam at $535-537/mt CFR, down from $542-545/mt CFR seen last week. Market sources agree that these are mainly traders’ offer levels. “To maintain the price in the local Indian market, Indian mills are not in a mood to miss any serious business opportunity. Prices in the local Indian market are also looking weak. We may see a correction by $12-15/mt soon,” a source said, commenting on mills’ targets at $515-520/mt FOB.
One large mill has been holding sale negotiations for 30,000 mt at $505-510/mt FOB net of discount, but did not disclose whether a final sales contract was inked.
As for the GCC market, the latest confirmed deal was at $540/mt FOB as reported last week, and most mills are trying to hold offers stable, but negotiations can be held at lower levels down to $525-530/mt FOB, sources believe.
In Europe, no price has been heard, with the previous level at $580/mt FOB. The new quota for Indian HRC has settled at 149,319 mt per quarter, which is 34 percent less than 225,305 mt before today’s announcement.
“Most of the export market is extremely sensitive as more sellers are emerging and chasing few buyers and demand is on the weak side. Pricing led by ex-China offers is extremely challenging. There are overproduction and weak demand both in India and China. Hence, aggressive discounting is the key, as it is a strong buyers’ market,” a source at a mill said.
