Ex-India hot rolled coil (HRC) prices have showed wide variations as sellers have been adopting a dual pricing strategy to cope with bearish sentiments among buyers in Asia and the Gulf, but have been maintaining higher levels for sales in Europe, SteelOrbis has learned from trade and industry circles.
Ex-India HRC offer prices for Asian and Middle Eastern destinations have been at $720/mt FOB, stable from last week, but to attract any interest prices should be below $700/mt FOB, most market sources agree, as buyers have expected declines to gather pace led by the softening of ex-China prices.
However, buying interest has remained strong from Europe, with deals continuing to remain at $820-840/mt CFR, but with a fall in the average deal size, the sources said.
The divergent pricing was evident from a 5,000 mt deal reported by a Gujarat-based mill for Oman delivery at $730/mt FOB and two small sales to Europe at an average $770/mt FOB.
There has been a rumor about an ex-India sale to Turley at $730/mt CFR, translating to $690/mt FOB or so, but a few exporting sources denied this information, saying that for now there are no strong reasons to cut prices sharply, given the good order books after previous deals.
“Until now Indian mills are able to achieve relatively better price realizations in Europe, while a bearish mood is spreading across Asia. However, there are tentative signals of even EU buyers reducing booking volumes, possibly anticipating a decline in line with other markets,” an official at a private mill said.
“The immediate short-term trend will be very important for Indian mills, all of which have increased export allocations for the April-June quarter by at least 15-20 percent, and are increasing domestic prices banking on the market for support amid tight local supplies. It will be a challenge to sellers if bearish contagion spreads led by softer ex-China prices,” he said.