Asian hot-rolled coil prices saw a moderate rise Oct. 4, with Indian mills raising prices in their domestic market even as the likely impact of the power crisis across different Asian countries on steel markets remained unclear.
S&P Global Platts assessed SAE1006 HRC on a CFR Southeast Asia basis at $869/mt, up $1/mt on the week. Platts assessed SS400 HRC 3 mm thick at $858/mt on a CFR Southeast Asia basis, up $1/mt on the week.
Chinese market participants remained absent in the export market on account of the National Day holidays, alongside South Korean market participants who were away on National Foundation Day public holiday. Trading activity in Southeast Asia, therefore, largely remained muted, even as buyers highlighted withdrawal of offers from both Russian and Indian sources. This is despite the easing of COVID-19-related lockdown in Vietnam’s Ho Chi Minh City, leading to mass exodus of migrant workers over the weekend. The country’s gross domestic product had fallen 6.17% on the year in July-September.
“Re-roller mills in Vietnam are in stable operation, keeping full capacity at all times because they received lots of orders before lockdown. But the melting mills (EAF, IF) and construction material mills have to reduce capacity, and are maintaining 30-50% only. This October, they may start to recover when projects are reopened,” a Vietnam-based trader said.
“We have reduced exports volume,” an Indian mill source said, adding that export offers from India “may go up slightly, depending a lot on China and Russia.”
Market participants deliberated on the likely direction sell-side offers may take after China’s return Oct. 8, with a few suggesting that the palpable power crisis -- which was now threatening to cripple India’s infrastructure -- may lead to higher offers in the short term. According to media reports, after China and the UK, India is the latest country which could face a severe power crisis with authorities warning that power plants have run perilously low on coal.
Indian mills increased HRC prices for October deliveries in its domestic market to the tune of Rupees 1,500-2,000/mt ($20-$26/mt) on account of high coking coal, ferro alloys and power costs, with another hike on the cards, according to sources.
“Flat segment in India is still weak, so I’m not sure if the customer side can accept an increase, most probably flat or minor increase, I guess. Russian [mills] still have some room for EU’s Oct-Dec quota and Indian quota has already finished. Considering all together, price won’t drop further,” a Japan-based trader said.
Market participants said they were unsure how the power shortages across China, and possibly in India, might affect downstream demand as well as the resulting demand-supply balance.
-- Steel Business Briefing
