The sluggish ex-India hot rolled coil (HRC) trade has just about been kept alive over the past week by discounted sales to Southeast Asia, while buyers in the Middle East have moved to the sidelines, following some previous bookings and due to the risks of rising freight costs resulting from the flare-up of regional tensions, SteelOrbis learned from trade and industry circles, July 14.
The SteelOrbis reference price for ex-India HRC has settled at $490-590/mt FOB, where the lower end of the range is down $10/mt over the past week.
According to the sources, with trade flows being disrupted again in the Middle East, there have been pressures on prices in other key Asian destinations, particularly Vietnam, which is the renewed focus of large Indian mills, even though workable prices are lower compared to the previous week. The latest sale of ex-India HRC to the UAE was reported at $530-535/mt FOB last week, down from $540/mt FOB sought earlier. But after that trading to the Middle East has fallen silent.
However, at the same time, there have been rumors that an eastern India-based mill concluded a deal for an undisclosed tonnage for deliver to Vietnam at around $490-495/mt FOB, translating to $520/mt CFR.
Similarly, another large integrated mill concluded a deal also to the Southeast Asian market for 15,000 mt at $495/mt FOB, the sources said.
Moreover, there has been talk in the market that some traders have been voicing $510/mt CFR Vietnam (which translates to $480-485/mt FOB), expecting the market to keep heading south. But there has been no information about a deal done at this low level, and most mills in India considers this level to be too low for now even for 3 mm material.
“After regional tensions in the Gulf region worsened over the past week and freight rates increased, other Asian destinations have become crowded with sellers. Prices are softening in Vietnam, and Indian mills though active in the market are settling deals at lower prices, both to remain competitive and cope with local oversupply and inventory pressures,” an Indian mill said.
“With sales in Europe and the Middle East expected to remain uncertain, there is no clarity on short-term trends in most other markets also under pressure from more volumes chasing weak demand. Indian mills will have to remain competitive below the $490/mt FOB mark to continue their presence in the Southeast Asian region, which has become the only immediate focus,” he added.
