Ex-India hot rolled coil (HRC) prices have been kept stable in the past week, but large mills have stopped submitting offers faced with the fall in ex-China prices in key destination like the Middle East, while, even though sentiments have improved slightly in Europe following the extension of safeguard duties, this has not been sufficient to trigger interest in imports.
Sources said that ex-India HRC prices are stable at $560-610/mt FOB, but most mills have not been submitting offers, being unwilling to adjust and compete with ex-China and ex-Vietnam exporters. According to sources, only a few deals for Indian HRC are reported to have been done in the Gulf region at around $598/mt CFR, which translates to around $560/mt FOB. “The market estimates workable prices for Indian HRC at $570-590/mt CFR, depending on the destination, which means Indian mills need to decrease their prices by more than $20/mt,” a market insider said.
Meanwhile, no firm offers for ex-India HRC have been heard in the UAE this week, where Chinese suppliers have decreased their prices by at least $10/mt week on week to $550-565/mt CFR.
Offers for ex-India HRC in Europe have remained at $665/mt CFR, or around $610/mt FOB, though no deals have been heard so far due to the safeguard quota issue. “In the month of July, we see HRC prices in India will remain under pressure until demand improves,” an Indian trader said.
“Declining global prices have squeezed the opportunities of overseas sales for Indian mills. We do not think there are sufficient margins for mills to adjust ex-India prices that would be necessary to attract buyers,” a source at Tata Steel Limited told SteelOrbis.
“Keeping macro fundamentals in view, we assess that exports will continue to remain a challenge in most key markets. Export allocations will need to be channeled for local sales, leading to supply pressures in the domestic market,” he added.