Export prices of Flat products are likely to see some improvements in the near term due to improving demand in South African & European markets. Currently, Indian export offers to African & European countries are at USD 540-550/MT. Some market players forecast that exports to African market are likely to rise as African currency Rand has seen some appreciation and this will lead to increase in imports by South African importers.
Indian manufacturers also export to European countries. Industry experts believe, demand in Europe is likely to remain strong and this will increase realizations from European markets. CNF prices in Europe have seen an improvement in the past few weeks. In April, one of the manufacturers in India exported a consignment of 2,000 MT of HR Coils to Belgium at around USD 550-560/MT FoB India. A trend of CNF prices in Europe is as shown below:
Import Scenario
Imports of HRC to India are still low owing to weak demand in the domestic market. However, domestic manufacturers might still feel the pressure on pricing due to increasing offers pouring from countries like China, Japan & Ukraine. In a small conversation with one of the leading importers in Mumbai, SteelMint learned that import feasibility is increasing and higher domestic prices may not hold on for a long period.
According to trade sources, current offers for HRC 2.5 mm is in the range of INR 38,000-39,000/MT (Ex-Works); however trades are taking place at comparatively lower prices. Appreciating INR will force more imports to the country and put pressure on domestic prices.
An importer based in Mumbai said, “Current offers of HR Coils of thickness 1.6-1.8 mm from Japan are at around USD 560/MT CFR Mumbai whereas offers from Ukraine are hovering at 550-560 levels. We have seen small pockets of deals happening in India. Recently, an importer has imported a small consignment of defective HR coils at around USD 516-520/MT to trade in the domestic market”.
International prices for Flat products have been trading quite lower as compared to India and some market participants believe that if these lower prices persist in the global markets, Indian domestic prices will see some corrections in near term.
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