India’s steel export offers continue to see sluggish demand in June across key markets that include the Europe Union, Middle East and the South East Asian region.
While higher-than-expected price quotations are said to be a key reason for subdued demand, sources said hot rolled coil (HRC) offers to South East Asia and the Middle East continue to face Chinese competitive price resistance, thereby impacting demand.
Offers to the Middle East are apparently in the $600 per tonne range as against expectations (primarily Chinese offers) being in the $550–580 per tonne range.
In case of Europe, sluggish economic conditions – after a brief period of improvement in early-June – persist.
European demand
In case of Europe, there was slight increase in price quotations early June, rising to $560-610 per tonne (lower and higher end) after settling in the $560-600 range, by mid-June.
In contrast, European HRC prices experienced a marginal uptick despite lacklustre demand. This increase coincides with the European Union’s extended safeguard measures, aimed at restricting imports from specific countries and potentially tightening supply within Europe.
India will be among the countries which could see a hit in its exports to Europe.
On the other hand, cold rolled coil offers to Europe saw a 6–7 per cent decline to $700 per tonne, as against $750 in the previous week.
According to consultancy firm, BigMint, the Indian steel mills have maintained their HRC export offers to Europe “unchanged”, focusing on the domestic market as a priority.
“Some sluggishness in domestic market is expected post June, as monsoons set in. Budget expectations will also weigh in on trade level prices while mills are also expecting counter-measures to safeguard duties of the EU,” a steel mill official told businessline.
Domestic Market updates
India’s imports of bulk HRC and plates have begun to grow, out-pacing exports.
The onset of the monsoon season is anticipated to reduce demand across various regions of India too.
“...narrowing profit margins and reduced sales within the trading sector, is fostering a pessimistic market sentiment. Moreover, the increasing influx of imports is poised to exert additional downward pressure on prices,” BigMint said in its report.
Some mill owners say the HRC market is showing “some sluggishness” and decline in sales are being witnessed. In parallel, coking coal prices are witnessing some uptick over the last couple of weeks.
“Market demand has weakened. And a mill price increase may push influx of imports,” the mill-owner said, adding: “Prices should be range bound in the mid-term.”