Ex-India hot rolled coil (HRC) prices have been kept stable during the past week at two levels depending on the destination, but trade activity has fallen silent amid intensified competition with Chinese suppliers in the Middle East and with sluggish demand and prices in Europe keeping importers on the sidelines.
Sources said that ex-India HRC offers are stable at $520/mt FOB in the Middle East but have rendered quite uncompetitive by aggressive ex-China HRC prices which were reported in several deals at as low as $475-480/mt CFR, resulting in ex-India offers languishing without success. “For Indian mills even $520/mt FOB is considered low as they aim to achieve much higher prices in Europe,” an Indian trader told SteelOrbis.
The sources said that ex-India offers in Europe have also been kept unchanged at $570/mt FOB, but are considered too high amid the declining prices of local mills and the sustained sluggishness of demand and the sullen mood, with demand not rising as per expectations in the region, keeping distributors away from imports.
“The Middle East market is slowing down in terms of demand as well as business activity ahead of the holidays. Demand has failed to revive as expected in key markets like Germany and Spain. Ex-China competition is very strong across these destinations. Hence, domestic sales remain the focus of Indian mills,” an affiliate of Tata Steel Limited told SteelOrbis.
“Most of July delivery bookings have been completed in the Middle East from ex-China supplies. We will assess demand in the region after the holidays and once bookings for August deliveries commence. But margins will remain under pressure on all export sales for Indian sellers,” he added.