The prevailing downtrend in China, Europe, and the Gulf Cooperation Council, coupled with slowed Indian domestic intake, has hampered Indian steelmakers’ hot rolled coil business.

Moreover, the influx of cheaper HRC from Vietnam and falling bids from Europe are pressuring Indian mills to soften their offers for both the domestic and export markets, sources tell Kallanish.

Indian mills are still maintaining initial HRC indications of $650-660/tonne cfr Antwerp and Spain for June shipment; however, no deals were concluded at this level. According to some sources, some small tonnages were booked at $645-650/t cfr Italy last week after the euro briefly strengthened against the dollar, translating to $605-610/t fob India.

Following the recent bulk deal conclusion at around $630-635/t cfr Italy from Vietnam, European buyers have dropped their expectations. A majority of buyers are targeting below $620/t cfr Italy for bulk tonnages, whereas Indian mills are sceptical about dropping their offers to this level.

"European market demand is down," a trading source says. "The rise in interest rates by the government to control inflation has plummeted sentiment in the region, so buyers are hesitant to pay more for Indian material when they have the option to procure cheaper materials from Vietnam and other origins."

"Indian mills are still offering for June shipment, and currently no buyer in Europe is interested in paying more for prompt shipment; hence, I do not think any deal will be concluded at these numbers," the source adds.

Meanwhile, offers for DC-01 cold rolled coil were heard at $760-770/t cfr Antwerp and Spain; however, no deals were reported. According to some market participants, buyers’ expectation for CRC is somewhere in the range of $730-740/t cfr Antwerp and Spain.

Following a recent deal of Indian structural-grade HRC at around $605-607/t cfr GCC, meanwhile, HRC offers from India marginally dropped to $600-605/t cfr GCC, translating to $570-575/t fob India.

"The European slowdown and falling sentiment in China have cautioned the GCC buyers, thus making sentiment weak in the region," says another trading source. Indian mills had not reckoned with prices falling this far, he adds.

In the Indian domestic market, the price for E250-grade HRC plummeted to INR 56,000-56,500/t ($677.36) ex-Mumbai in the retail market. Meanwhile, offers for E350 and GP coils are heard at INR 58,500-59,000/t and INR 66,000/t ex-Mumbai, respectively.

Amid the influx of Vietnamese HRC following the most recent bookings at $590-600/t cfr India, participants expect Indian mills to soften their offers for the domestic market. Moreover, the upcoming monsoon will further slash demand in the Indian market. Any major drop in domestic offers will in turn impact India’s position in the export market.

Conversely, Indian mills are hesitant to drop their offers too much in Europe, mainly out of fear that too much of a price drop will put India under anti-dumping surveillance in Europe.