In the Indian market, hot rolled coil (HRC) prices have not shown any changes this week. As we mentioned in our last analysis, Indian buyers, who are focused on new offers from China, have not seen much difference in price levels over the past week. In the local Indian market, hot rolled coil prices of mills, which were at INR 30,000-35,000/mt last week, are still standing at the same levels, while local traders' offers are heard to be INR 1,000-1,500/mt lower than the mills' prices.
Meanwhile, import offers given from China have shown not any significant changes for the time being. Ready stock HRC offers are standing in a wide range. Traders' offers of ready stock HRC ex-China at $590-600/mt CFR have remained neutral, while some offers at $570-580/mt CFR are also heard due to the lack of interest on the part of Indian buyers. The main reason for the decline in offers to the levels of $570-580/mt CFR is the attempt of Chinese exporters to melt down their inventories in order to continue to benefit from the old tax rebate rates until July 15. However, weakness on the demand side has also been felt in the market this week and Indian buyers have not shown interest in current offer levels. Ex-China import offers for 0.5 mm ready stock cold rolled coil are reported to be standing at $740/mt FOB, while 0.3 mm ready stock galvanized product offers are heard to be at $800/mt FOB.
The general opinion in the market is that prices may climb upward due to the Chinese government's cancellation of the export tax rebates. Even though offers given to India have not changed for now, there is a strong possibility that prices may increase in the coming days. Another opinion in the market is that boron-added HRC production may increase since a 13 percent tax rebate is still effective for this product. SteelOrbis has heard from market sources that Chinese producers are adding boron to their HRC and then giving export offers. One Chinese producer's offer for boron-added HRC is heard to be standing at $660-670/mt CFR Mumbai. Market players are wondering how Indian buyers will respond to these offers, because ports in India are currently full of previously purchased orders.
While Chinese producers are offering boron-added HRC to the India, HRC offers from CIS countries are expected to attract interest among buyers in the region. Ukrainian mills' HRC offers at $520-530/mt FOB are still valid. Generally, weakness of demand and the uncertainty in the market are the factors affecting Indian buyers' purchasing activities. Indian market players expect that the markets will gain momentum as demand gets stronger in the late summer and in line with the offers given from the CIS.