Posted on 28 Jul 2022
Amid a global market slowdown that has seen falling Chinese, South Korean and Japanese offers, Indian mills have also lowered their hot rolled coil quotes this week, sources inform Kallanish.
Regular importers of Indian material are nevertheless seen booking HRC from other origins mainly because while Indian coil matches on price, it is alloyed with boron. Buyers are strongly advocating India reduce its offers further, to make them more attractive.
Initial quotes for 2mm+ re-rollable grade HRC to the Gulf Cooperation Council plunged $20-30/tonne on-week to $660-670/t cfr Jebel Ali earlier this week. Offers dropped by a further $25-30/t on Wednesday to $635-640/t cfr Jebel Ali, with a few mills ready to ship HRC at as low as $630/t cfr Jebel Ali, for August shipment. This equates to $590-600/t fob India.
A regular buyer of Indian material has reportedly booked 10,000 tonnes of re-rollable HRC at $650/t cfr Jebel Ali from a Far Eastern supplier.
“Currently, we are seeing other origins are more aggressive than India and buyers are also keen to import non-boron materials over the Indian boron-added materials, seeing the parity in the offers,” opines a senior trading source.
No offers were heard for Vietnam this week. According to a source, an Indian mill concluded a deal last week for 30,000-35,000t of re-rollable grade HRC at $610/t cfr Vietnam.
Indian mills are heard indicating HRC at $660-670/t cfr Turkey and $700-710/t cfr Antwerp this week. However, no deals were heard concluding. A few tier-2 mills are ready to ship at below $700/t cfr Antwerp for large quantities, one source informs.
One Indian mill was heard offering DC-01 0.8mm+ cold rolled coil at $815-820/t cfr Antwerp this week.
Meanwhile, E250-grade HRC offers in the domestic market are heard at INR 58,000/t ($725.79/t) ex-Mumbai this week. Offers for E350 and GP coils are noted at INR 61,000/t and 67,000-67,500/t ex-Mumbai, respectively.
A Ukraine-based mill meanwhile reportedly offered HRC at INR 48,000/t cfr Mumbai on Wednesday, creating panic in the Indian domestic market.
The prevailing downtrend in the export market has been so far compensated for by the stable domestic market, as mills were able to average out low export offers with comparatively high domestic offers. However, increased HRC import volumes are expected to pressure Indian mills in their domestic market.
Moreover, current coking coal inventories were bought at a very high price, which is again preventing mills from dropping their HRC offers to $550/t fob India to compete with Chinese mills in Vietnam. However, the recent drop in coal values will help them to average out their cost and carry out negotiations on the back of this.
But again, the question lies in whether India will cut its exports and focus on the domestic market, or whether mills will average out costs and continue exporting low-priced HRC.
Source:Kallanish
