Indian steel exporters are experiencing a quiet first month of the New Year. No big deals have happened so far into January, 2021 and traders say they do not expect any fireworks either for the rest of the month. One reason for the present dull trend is that Europe was closed from December 20, last calendar till January 10 of the present year, for almost three weeks because of the Christmas and New Year holidays. No deals were struck during this period.
However, after players returned to the market post-the year-end holidays, only small lots have been booked for Europe in hot rolled coils (HRCs) and only from mills like JSW and AM/NS India.
A source informed that, collectively, only 30,000-40,000 t have been booked across customers and distributors in Europe in January so far.
In billets, no bookings are emerging out of India except for from RINL alone, which is being sold through the bidding system, SteelMint learnt.
December had seen an unexpected turn of events with European buyers being very active in the Indian market.
Indeed, no major exports activity was detected even in the last one week. There is resilience from European buyers. But, some say this was supposed to happen. The reason is, if buyers from Europe book from Indian mills now, the deliveries will not happen before mid-April. On the other hand, if they book with local sellers, the material would reach them in a week's time.
A source confirmed: "No deals were booked in the first 10 days of January. On the other hand, prices increased by INR 5,000-6,000/t in the domestic market. So obviously the mills were more interested in selling in the home market. In December, yes, European buyers had booked many lots but they have gone quiet in January and so have the Indian mills in terms of exports."
Indian mills are not offering to Vietnam and UAE markets either.
Prices too are at their peak of around USD 850/tonne CFR for Europe. Few deals are happening but at astronomical pricing. One particular mill was heard booking HRC consignments to Europe at $840-860/tonne CFR.
One trader said the market expects January export volumes to close at a modest total volume of 50,000-60,000 tonnes.
Furthermore, there are predictions that the market could go soft in February, with prices likely climbing down from the present CFR levels. However, mills and traders, at present, have adopted a wait-and-watch stance. "Let us see. There is still one more week to go. Prices will go down...," hazarded a source.
It is also expected that mills will start focusing on the exports market from March, 2021 onwards.
Dec Exports up 15% m-o-m
Overall exports from India mills rose 15.22% provisionally in December, 2020 to 1.06 mn t over 0.92 mn t in November, buoyed by the deals to Europe. As per SteelMint data, flats exports were up around 7.54% provisionally to 0.57 mn t over 0.53 mn t in November. Finished longs rose a sharp 50% in December last year to 0.09 mn t against November's 0.06 mn t while billets exports were up around 21% to 0.40 mn t in the last month of 2020 against 0.33 mn t in November of that year.
It may be noted Indian steel exports are down around 59% in December against the peak of 2.56 mn t seen in June, 2020.
Source : SteelMint
- [Editor:Catherine Ren]