Ex-India hot rolled coil (HRC) prices have been kept largely stable by mills and, even though a few stray deals at the higher end of the range have led to cautious optimism among a few participants, the overall mood has remained negative as the number of deals has been too low and given the pressure from competition.
Sources said that ex-India HRC prices are unchanged at $545-570/mt FOB, with a few deals at the higher end of the range reported for Middle East destinations, leading to marginal trade activity amid the generally negative sentiments.
In particular, according to sources, a western India-based integrated mill has reported a trade for 5,000 mt for delivery to Bahrain at $567/mt FOB, while another mill booked a tonnage of 8,000 mt for delivery to the UAE at $565/mt FOB. However, several market participants labelled the deals as just “stray” deals and said they are unlikely to develop into a trend immediately, in view of the approaching Eid and the low business activity in the region. In the meantime, sources said that two major Indian steelmakers do not have allocations for May shipment anymore, while new price targets from a few mills have already been voiced at around $600/mt FOB for June shipment.
Meanwhile, while offers for ex-India HRC to southern Europe have heard at around $565-570/mt FOB, while no new deals have been reported so far, as most European customers have been refraining from new purchases due to the uncertainty over potential safeguard duties for the third quarter, while the second quarter allocations were filled just in the first few days after the new quota period started on April 1.
Furthermore, the sources pointed out that bids received from traditional Asian markets did not exceed $520-530/mt FOB, the same as last week, which were not acceptable to local sellers, indicating the continuing strong pressures in key markets and oversupply from China.
“We are currently neutral on the Middle East despite a few sales. More clarity will be seen after the holidays. Prices in Europe are near a bottom. But we are still not sure if distributors are looking at imports. We have received reports of some buying interest below the $600/mt CFR mark but do not think any Indian seller would be interested,” a source at ArcelorMittal Nippon Steel Limited told SteelOrbis.
“We need the market in Asia to stabilize for a period before we finalize export allocations for the current quarter. There is no rush. Any possible reasonable bid can be met from our normal inventories,” another source said.