Posted on 13 Oct 2022
Consecutive drops in global hot rolled coil offers and high competition from Japanese and Korean mills have reduced the scope of Indian HRC export deliveries. Despite the rupee depreciation, Indian mills are seeing low acceptance from overseas buyers, but they do find it viable to sell in the domestic market, Kallanish notes.
Following the recent conclusion of multiple deals in the Gulf Cooperation Council at $595-610/tonne cfr, Indian offers of $625-630/t cfr – netting back to $580-585/t fob India – are being shunned by buyers. According to a source, following a deal concluded in late September at $630-635/t cfr GCC, no bookings have been done by Indian mills to the GCC.
In Vietnam, buyers are seen waiting for the domestic mills – Hoa Phat and Formosa – to release their new offers. Furthermore, the Vietnamese market has become unviable for a majority of Indian mills as deals are concluding there on a ‘cfr’ basis at $10-15/t cheaper than Indian ‘fob’ prices.
After a month-long gap, India received an enquiry for structural-grade HRC from Turkey, with bids hovering at $610-620/t cfr Turkey, unacceptable for Indian mills. The price indication from India was heard at $645-650/t cfr Turkey, translating to $585-590/t fob India.
Sources confirm that no enquiries from Europe were heard this week. However, the price indication to Italy was heard at $680-690/t cfr Italy. Issues on CE certification, the depreciating euro, low demand from the automotive and appliances sectors in Europe, and low-priced offers from the competition are limiting enquiries from Europe for Indian HRC.
Meanwhile, offers for DC-01 cold rolled coil plunged to $780-785/t cfr Antwerp and 1mm Z275 grade GI is pegged at $890-900/t cfr Antwerp.
The Indian domestic market is thus the only option left for Indian mills amid the global slowdown. Offers for E250-grade HRC are hovering at INR 56,800-57,000/t ($690.20) ex-Mumbai. Offers for E350 and GI are heard at INR 60,000/t and INR 66,500/t ex-Mumbai, respectively.
“India is lucky that they have a good domestic market … where offers are the costliest in the world,” says a source. “The domestic market is the only option for mills, at least for a couple of more weeks, as we don’t see any viability in exports from India at the moment.”
Domestic buyers, however, feel the market may not be able to absorb any further hikes by the mills, and that demand has moderated following recent inventory restocking.
Going forward, domestic demand will continue to attract Indian mills. The current government will try to finish infrastructure projects before elections in 2024, creating huge scope for domestic demand in India. However, the main question that arises is whether the government-led demand creation will support mills’ price hike expectations.
Source:Kallanish
