Falling global sentiment for finished flat steel coupled with weaker Indian domestic demand have made Indian mills revise their hot rolled coil offers in both the export and domestic markets.

Furthermore, the Indian government recently decided not to increase HRC import duties, thereby opening the door for cheaper HRC imports into India and intensifying competition for Indian mills, Kallanish notes.

According to sources, offers for small-tonnage cargoes of structural-grade HRC dropped further this week to $750-760/tonne cfr Antwerp, France, and Spain, netting back to $690-700/t fob India.

Meanwhile, bulk offers from India were heard at $720-730/t cfr Italy, translating to $670-680/t fob India, depending on the buyer and quantity.

Quotes for DC-01 cold rolled coil fell to $850-855/t cfr Antwerp.

Falling prices and plunging sentiment in Asia have cautioned European customers. The majority of European buyers have held off from purchasing and expect to resume bookings once the situation becomes clearer in Asia, especially China.

"Prices from all origins are falling in the European market," says a source. "There is a cash liquidity issue, and demand is also not so good there ... the buyers are closely monitoring the market and waiting for the market to get stable."

Indian mills’ re-rollable HRC target price in the Gulf Cooperation Council for June shipment dropped to $645-650/t fob India, translating to around $670-680/t cfr GCC. However, sources feel Indian prices are still too high compared to other origins. Vietnam, meanwhile, remains unviable for Indian mills.

"We are seeing week-on-week HRC price corrections by the Indian mills," says another source. "We feel the market has already approached the recent bottom and there is very limited room for further corrections in the future. After this, the majority of Indian mills will go for [production] shutdowns."

Speaking about domestic demand, the source says: "The approaching monsoon and increasing HRC imports will definitely pose a threat for Indian mills and, owing to this, they might go for further corrections in the future, but it is too difficult to predict the exact level for July while sitting in May."

In the Indian domestic market, mills dropped their listed offers for E250 grade HRC to INR 59,000-60,000/t ($727.66) ex-Mumbai from INR 61,500-61,750/t) ex-Mumbai. Meanwhile, offers for E350 and GP coils are heard at INR 62,000-62,500/t and INR 71,500-72,000/t ex-Mumbai respectively.

According to sources, a deal for Vietnamese HRC was concluded at $670/t cfr India last week. This week, Indian buyers are aiming to book a Vietnamese cargo at $640/t cfr India.

"Mills have dropped offers but they are still too high for us considering the import offers we are receiving," a domestic trader informs. "Offtake is average and demand is also not so strong considering the approaching monsoon ... We expect offers to go further down by INR 1,500-2,000/t in the coming days."