Indian Exporters hold HRC Offers Despite Thin Demand

Indian exporters hold their offers steady at previous months level amidst apprehension regarding the extension of rebate offered to Chinese exporters. Global Flat steel prices and falling offers from CIS countries have forced Indian exporters to keep their offers unchanged for this month.

Currently, export offers from India are stable at USD 495-500/MT FoB. An exporter while talking to SteelMint confirmed that lack of clarity over the rebates offered to Chinese exporters and depreciation in Ruble have restricted them to alter their offers for this month.

Russian currency, Ruble, which corrected over 70% this year on account of falling crude oil prices have given an edge to Russian steel makers. Offers for good quality HRC from Russia to Europe & Middle East are much cheaper than Indian offers. Only issue is, shipment takes little more time than India.

Europe & UAE remain one of the prime export markets for India. Export of Flat products to Europe stood at around 61,000 MT in Sep’14. However, it was around 23,000 MT in Nov’14. Global Flat steel prices have seen a sharp correction in recent months. Import prices in Europe have corrected by 9% between Sep’14 & Dec’14. While, prices in Middle East have corrected by 13 % during this period. Currently, European HRC is offered at USD 499/MT, CIF Europe. Whereas, Middle-East offers are assessed at around USD 485/MT CIF.

Fate of European Markets

Flat steel prices in Europe have corrected due to oversupply in the domestic market and competitive offers from local mills. The deadline to meet the sales target for financial year end has led to cheaper offers from domestic mills. Imported offers are likely to be under pressure in the short-term.

Last year, manufacturers in India relied on the export market due to supporting exchange rate and a slowdown in the domestic demand. However, industry experts believe that this fiscal is going to be more challenging  for Indian manufacturers, who have to compete with a tough international market.

HRC Prices as on 16 Dec, 2014