Friday, July 01,
The market for flat products in India have calmed down due to the monsoon. Local trading companies whose stocks are more than moderate are refraining from buying the material in large lots. Yet, domestic producers do not make reductions so far, realizing that lower prices will hardly let them increase the number of deals in the domestic market substantially. Demand in International markets is also low, though suppliers have cut quotations. However, foreign buyers are in no hurry to make deals amid downward trend in the global market for sheets and coils.
Market players make quite pessimistic forecasts – buying activity in the domestic market is expected to stay sluggish till at least the end of July. However, producers intend to keep prices unchanged. Downward moves of Chinese suppliers may prevent demand from growing. As a result, Chinese HR coils are offered by $20-30/MT lower than the material offered in India, while CR products and plate – even by $70-80/MT and $90-100/MT, respectively, lower. The situation is also aggravated by the pricing policy of Japanese exporters who have cut official quotations by $10/MT to $750-760/MT FOB, and are ready to grant discounts of some $40-45/MT when making deals for large lots.
By this time, export prices for Indian flats have dropped by $5-20/MT in two weeks. In particular, Indian producer Essar Steel offers HRC to the UAE at $720/MT FOB ($750/MT C&F Dubai), which attracts some pipe producers. Nominal prices for pipe making HRC to Europe are at $710-725/MT FOB ($750-770/MT C&F Antwerp), but demand from European buyers remain low.
As for imports, quotations for Chinese HRC and plate have dropped by $10-25/MT, while those of CRC – more substantially, by $40-45/MT in two weeks. As a result, HR and CR products from China are offered to India at prices by $15-45/MT and $70-100/MT respectively lower, including 5% import duty, than those for local products. Nevertheless, local trading companies expect further reductions in prices for the material from China, saying that they are ready to buy Chinese HR products at prices by at least $15/MT lower than current ones. In particular, bids for HRC, plate and CRC do not exceed $700/MT C&F, $715/MT C&F and $750/MT C&F, respectively. Taking into account the fact that domestic prices for the material are falling at slower pace in China, while raw material suppliers are trying to reverse the downward trend, export quotations will probably remain stable for some time.
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