Posted on 04 Aug 2022
Indian hot rolled coil demand has plummeted on the summer holidays in Europe, devaluating Turkish lira against the dollar, low demand for Vietnamese downstream steel in Europe and the US, and lack of boron-added HRC acceptability. The limited Gulf Cooperation Council (GCC) bookings are the only demand currently being received in export markets, Kallanish motes.
The majority of Indian mills have stopped reducing offers below $580/tonne fob India and are heard explaining to traders that domestic sales are occurring on “robust” retail and OEM demand. Traders, however, find this unrealistic considering the back-to-back falls in domestic offers.
Initial quotes for 2mm+ structural grade HRC to the GCC have dropped to $630-640/t cfr GCC this week, whereas offers for 2mm+ SAE 1006 re-rollable grade HRC are heard at $650-660/t cfr GCC. This equates to $580-590/t fob India for the structural grade HRC and $600-610/t fob India for the re-rollable grade.
Last week, a couple of tier-1 Indian steelmakers sold multiple cargoes of structural grade HRC to UAE-based tube- and pipe-makers at $635-640/t cfr UAE for end-August and September shipment.
Indian structural grade HRC offers to Turkey are heard at $650-660/t cfr Turkey; however, no deals were concluded. Turkish buyers are seen uninterested in purchasing imported HRC at higher prices than their domestic HRC amid the prevailing devaluation of the lira.
“The market is slow in India and, only because of short lead times, buyers in UAE are preferring India over South Korea, China and Japan,” informs a trading source. “Moreover, India doesn’t have any option left apart from selling in the GCC now.”
No firm enquiries were heard from Europe, as a majority of buyers are on holiday and have sufficient inventories to roll downstream. Indications for structural grade HRC to the EU were heard at $680-690/t cfr Antwerp and $650-660/t cfr Italy.
“European tube makers and service centres have issues with boron-added Indian HRC and a majority of them prefer buying costlier HRC from South Korea over India,” says a source active in Europe. “Only re-rollable HRC will find its way in Europe.”
Indian mills have stopped offering HRC to Vietnam amid the continuous fall in offers from China and domestic producers. Moreover, sources say the European holidays have in turn directly impacted demand for Vietnamese downstream steel and indirectly impacted demand for imported HRC in Vietnam.
The majority of Indian mills have officially revised domestic HRC quotes in India to INR 58,000-58,500/t ($732) ex-India. This will bring down domestic offers further, considering the sizeable discounts mills are offering to wholesalers.
The majority of Indian mills have preferred to advance their maintenance shutdowns over dropping export offers further. Considering rising inflation denting the purchasing power of buyers, coupled with falling feedstock offers and overall demand, it is expected HRC prices will remain low-to-stable in the coming months.
Source:Kallanish
