Posted on 26 Jul 2023
Indian mills have reduced export allocations. One out of the three major steelmakers continues to face production losses, whereas others are offering limited quantities, sources tell Kallanish.
According to multiple sources, the production losses faced by the two major Indian mills totalled approximately 200,000-300,000 tonnes in July. This will impact August and September shipments and, as a result, mills have limited export allocations.
Nevertheless, owing to limited demand for hot rolled coil globally, the Indian domestic market remains the strongest market for steel mills. "The mills are not in a panic ... Indian domestic demand is relatively stronger than exports. The production loss would be adjusted on the export allocations, meaning if the export prices are not matching our expectations, then we will shift more quantity to the domestic market," a mill source informs.
According to sources, no firm offers for structural grade were made by Indian mills to European. However, some market participants inform that although Indian mills are not offering proactively, they are voicing their indications at around $690-700/tonne cfr Antwerp and Bilbao for firm enquiries. Given the supply issues in India, it looks like mills do not want to sell and are therefore floating high numbers, sources add.
"The outlook looks like a cusp now," a source says. "Every seller, including India, Indonesia, Vietnam, and Japan, is increasing their offers in Europe, but buyers are not accepting the hike on the back of slowed demand from end users and the automotive sector. Unless and until demand starts recovering in Europe, these hiked numbers do not look to sustain in the long term."
"Moreover, the upcoming summer holidays in Italy will further plummet sentiment for HRC, as Italy is one of the largest destinations for Indian HRC," the source adds.
Meanwhile, another Indian steel major is heard negotiating for re-rollable grade HRC at $635-640/t cfr Italy versus the buyer’s bid of $590-595/t cfr. Indian mills are reportedly unwilling to drop their numbers amid the strong domestic market support.
Amid the HRC supply shortage, Indian mills have scaled up exports of galvanized coil to Europe. According to sources, deals for Z140 0.52mm GI were concluded at $860-865/t cfr Bilbao last week.
Indian mills have also raised their offers for DC-01 grade cold rolled coil to $755-760/t cfr Antwerp from $745-750/t cfr Antwerp.
Following the hikes by suppliers in other origins to the Gulf Cooperation Council market, Indian mills have also raised their offers marginally, to $620-625/t cfr GCC for structural and tube-making grade HRC. A deal for 3,000 tonnes of structural grade S275 JR was concluded at $615-620/t fob India to the GCC, equating to around $635/t cfr GCC.
Indian re-rollable HRC offers in Vietnam are hovering at $590-595/t cfr Vietnam; however, no deal has been concluded.
In the Indian domestic market, retail E250 grade offers were heard at INR 55,500-56,000/t ($677.81).
Source:Kallanish
