Following recent deal conclusions in Vietnam and the Gulf Cooperate Council, Indian mills have hiked their hot rolled coil offers on the back of surging production costs. This hike, however, looks unworkable for buyers as the majority of re-rollers are having trouble selling their galvanized coil in the US, Kallanish notes.

Initial quotes for 2mm+ SAE 1006 HRC have surged this week to $650-660/tonne cfr GCC, equating to $600-610/t fob India. This follows a deal for 40,000-50,000 tonnes of HRC concluded by a major tier-1 Indian mill last week at $620-625/t cfr GCC.

According to a source, buyers reportedly received offers at as high as $670-680/t cfr GCC on Wednesday.

“This hike is hypothetical, as the only market left for Indian HRC is the GCC, and hiking offers here against very low demand will not work for India,” opines a trading source. “This usually happens during the second, third week of each month, when Indian mills start negotiations in the GCC.”

Structural grade HRC offers to Europe are heard at $670-680/t cfr Italy and $700/t cfr Antwerp. Meanwhile, offers for DC-01 grade CRC fell marginally to $785-790/t cfr Antwerp and 1mm Z275 grade zinc-coated galvanized steel offers are heard at $990-1,000/t cfr Antwerp.

"Europe has become a difficult market for India ... mainly because of boron addition," says a source. "Tube- and pipe-makers are hesitant to book Indian boron-added material, and service centres have also reduced their intake. India can get acceptance from re-rollers but they also have ample inventories left."

A tier-1 Indian mill sold 30,000t of SAE 1006 HRC at $580-590/t cfr Vietnam for September shipment last week. Following this deal, Indian offers reportedly surged to $600-615/t cfr Vietnam for October shipment. Hoa Phat recently revised it domestic HRC offer to $595/t ex-works, which makes Indian offers unworkable for Vietnamese buyers.

Sources inform of receiving enquiries for HRC from Egypt but, owing to the dollar shortage there, these have not translated into deals. Moreover, Egyptian traders are heard buying Russian cargoes at comparatively lower prices.

Indian mills have sold a good quantity of HRC to Nepal at $630-640/t cpt Raxual. Offers in the domestic market fell to INR 57,000-57,500/t ($718) ex-Mumbai.

A majority of Indian mills have costlier coking coal inventory which was procured in May and June at $600/t cfr India levels. However, subdued global demand, coupled with inflation at a microeconomic level, continues to pose a threat to any price hike by Indian mills.

Moreover, back-to-back consecutive price drops by Vietnamese domestic HRC mills are further restricting India’s roll out of higher offers there.

Market participants continue to question the viability of Indian HRC offers in the export market, especially when there is very limited acceptance of Indian boron-added material. Mills, on the other hand, are seen standing firm on their price hikes and are hesitant to soften their offers, except for large-quantity deals.