Following
recent deal conclusions in Vietnam and the Gulf Cooperate Council, Indian mills
have hiked their hot rolled coil offers on the back of surging production
costs. This hike, however, looks unworkable for buyers as the majority of
re-rollers are having trouble selling their galvanized coil in the US, Kallanish notes.
Initial quotes for 2mm+ SAE 1006 HRC have surged this week to
$650-660/tonne cfr GCC, equating to $600-610/t fob India. This follows a deal
for 40,000-50,000 tonnes of HRC concluded by a major tier-1 Indian mill last
week at $620-625/t cfr GCC.
According to a source, buyers reportedly received offers at
as high as $670-680/t cfr GCC on Wednesday.
“This hike is hypothetical, as the only market left for Indian
HRC is the GCC, and hiking offers here against very low demand will not work
for India,” opines a trading source. “This usually happens during the second,
third week of each month, when Indian mills start negotiations in the GCC.”
Structural grade HRC offers to Europe are heard at $670-680/t
cfr Italy and $700/t cfr Antwerp. Meanwhile, offers for DC-01 grade CRC fell
marginally to $785-790/t cfr Antwerp and 1mm Z275 grade zinc-coated galvanized
steel offers are heard at $990-1,000/t cfr Antwerp.
"Europe has become a difficult market for India ... mainly
because of boron addition," says a source. "Tube- and pipe-makers are
hesitant to book Indian boron-added material, and service centres have also
reduced their intake. India can get acceptance from re-rollers but they also
have ample inventories left."
A tier-1 Indian mill sold 30,000t of SAE 1006 HRC at $580-590/t
cfr Vietnam for September shipment last week. Following this deal, Indian
offers reportedly surged to $600-615/t cfr Vietnam for October shipment. Hoa
Phat recently revised it domestic HRC offer to $595/t ex-works, which makes
Indian offers unworkable for Vietnamese buyers.
Sources inform of receiving enquiries for HRC from Egypt but,
owing to the dollar shortage there, these have not translated into deals.
Moreover, Egyptian traders are heard buying Russian cargoes at comparatively
lower prices.
Indian mills have sold a good quantity of HRC to Nepal at
$630-640/t cpt Raxual. Offers in the domestic market fell to INR
57,000-57,500/t ($718) ex-Mumbai.
A majority of Indian mills have costlier coking coal inventory
which was procured in May and June at $600/t cfr India levels. However, subdued
global demand, coupled with inflation at a microeconomic level, continues to
pose a threat to any price hike by Indian mills.
Moreover, back-to-back consecutive price drops by Vietnamese
domestic HRC mills are further restricting India’s roll out of higher offers
there.
Market participants continue to question the viability of Indian
HRC offers in the export market, especially when there is very limited
acceptance of Indian boron-added material. Mills, on the other hand, are seen
standing firm on their price hikes and are hesitant to soften their offers,
except for large-quantity deals.