Low-priced Indian steel exports engulf SE Asia

Posted on 23 August 2019

Source: Kallanish

The continuous fall in Indian export prices in Southeast Asia is attracting the attention of market participants, Kallanish notes. While low-priced Indian hot rolled coil has already depressed the Vietnamese market, Indian long products exports are now starting to affect the region.

Indian blast furnace billet from two mills is currently offered at $435/tonne cfr Manila, Manila-based importing and trading sources say. “India seems to be really hungry,” a Manila importer observes. Current Indian prices are much lower than offers at around $456/t cfr Manila in the second half of July and $448/t cfr in the first week of August.

Finished steel prices are low in India, so there is still room for Indian blast furnace billet to fall to $430/t cfr SE Asia "…anytime," says an Indian trader. While offers for Indian wire rod are not widespread, some Manila buying sources report an offer at $470/t cfr, which Indian traders say is possible (see separate story).

“It’s more than just the seasonal lull,” another Indian trader says. “Finished steel is not moving, rebar is not selling. A lot of infrastructure projects are on hold,” he adds. Various sectors have been affected by a slowdown in the Indian economy including the automotive, and the real estate and property sectors.

The Indian economy has slowed down in recent months, with gross domestic product growth falling from 6.6% to 5.8% in the quarter ended March. Nomura has forecast for India's economic growth to slow further in the April-June quarter to 5.7% amid a contraction in consumption, weak investments and an under-performing service sector, according to Indian press reports. India’s Central Statistics Office is due to release June-quarter GDP figures on 30 August.

Meanwhile, Indian HRC export prices are still under pressure in Vietnam. SAE 1006 grade 2mm and up thickness HRC from a leading Indian mill is offered at $472/t cfr. “The supplier is welcoming bids at $470/t cfr,” a Vietnamese trader says. A deal for 20,000t of the same grade and thickness Indian HRC concluded at $475/t cfr Vietnam on Wednesday last week.


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