Slowed hot rolled coil buying in Europe, coupled with high competition from Chinese exporters and sluggish Indian domestic demand have together pushed Indian mills to drop HRC offers. Despite lowering export offers, Indian mills are not reported to have found much interest this week in Europe, sources inform Kallanish.

“There is chaos in the HRC market; offers indicated today expire tomorrow,” says a senior trader. “Sentiment has pushed down Indian offers, and mills are trying to book big tonnages even by compromising on offers.”

Initial offers for bulk quantities to Europe have dropped to $1,220-1,250/tonne cfr Europe, equating to $1,100-1,120/t fob India, depending on mill and port of origin. For small quantities, meanwhile, mills are indicating $1,280-1,300/t cfr Europe. The Indian mill that sold special grade S355 HRC recently at $1,400/t cfr UK is rumoured to have sold a top-up tonnage this week of 2,000-2,500t at $1,410-1,420/t cfr UK to the same buyer.

Offers for base S275 grade HR plate are hovering at $1,530-1,550/t cfr Europe. An Indian giant booked around 2,000t earlier this week of S275-grade HRC for May/June shipment at $1,500/t cfr Europe.

“This week, HRC is weak and trending lower due to less demand viz a viz supply. There is a quota to how much HRC Europe can take from India, plus India is not offering to Vietnam, the Middle East and Turkey; all these are summing up to pressure Indian HRC offers,” says a HRC trader.

Indian offers for HRC in the Gulf Cooperation Council are noted at $1,100-1,130/t cfr Jebel Ali; however, no deals were heard. No firm offers to Vietnam were heard this week.

Indian mills have further hiked E250 grade HRC domestic quotes to INR 78,000-78,500/t ($1,028) ex-Mumbai. Offers for E350 and galvanized plain sheet are hiked to INR 81,000-82,000/t ex-Mumbai and INR 89,000-90,000/t ex-Mumbai, respectively.

Indian HRC offers are expected to come down further in the coming days on sliding raw material and fuel prices. Australia's coking coal offers have softened recently, while India has also begun importing coking coal from Russia at cheaper-than-Australian prices, which will ultimately ease the cost of steel production.

Moreover, the strategic move of importing around 13 million barrels of Russian brent crude oil by India at a discounted price will help the nation to bring down the freight cost of shipping. Lower logistics and production costs will help Indian mills to negotiate and book large tonnages amid stiff competition.