Posted on 08 Dec 2022
Recent bookings in Vietnam, the Gulf Cooperation Council, Europe and Turkey have encouraged Indian hot rolled coil producers to hike their offers in these markets. Moreover, the recent hike in HRC prices by other origins is also giving supply-side support, while Indian mills anticipate gaining short-lead-time premiums, as they did last month.
“There is a good acceptance coming in from the GCC region and India needs to adjust itself with the trend … hiking offers tremendously every time over competitors quotes on the back of shorter delivery time will not help the mills,” a source tells Kallanish. “After the winter holidays in Europe, the market will become a buyer’s market, meaning there will be more suppliers and fewer buyers and, in this situation, the market might reverse direction.”
According to sources, Indian structural grade HRC offers to Europe are heard at $620-625/tonne cfr Italy and $630-635t cfr Antwerp. Last week, a deal for 20,000 tonnes of HRC was heard concluding at $625/t cfr Italy and 10,000t of hot rolled oiled and pickled at $655/t cfr Italy. This follows a 20,000t deal concluded by an Indian mill a week prior to last for DC-01 cold rolled coil at $650/t cfr Antwerp.
Another mill sold a parcel of 20,000t of HRC at $590/t cfr Turkey last week. This follows a long-time offer/bid mismatch between Indian sellers and Turkish buyers, where the former was hesitant to offer low and the latter was not hiking bids from $560-570/t cfr Turkey.
According to sources, an Indian steel major concluded a deal last week for 30,000t of structural and tube-making grade HRC at $580-590/t cfr Jebel Ali. Current offers are hovering at $600-610/t cfr GCC, netting back to $560-570/t fob India.
“There is huge demand in the GCC market,” informs the seller. “We assume another 50,000t of HRC negotiation is on the table and multiple sellers are seen offering for the same.”
Meanwhile, India also sold around 30,000t last week of re-rollable HRC at $555-560/t cfr Vietnam. According to sources, Vietnam, coupled with the GCC, will be the major markets in the coming three to four weeks. The recent hike by China has also lifted offers from other origins.
December and January will be crucial months for the HRC market. Europe will be off on holiday for a couple of weeks and, owing to this, China will try to book maximum cargoes in the GCC and Vietnam, before the Chinese New Year holidays in January. Market participants see the surge being only short term and expect a market correction on the back of stiff competition among sellers.
Source:Kallanish
