Recent breakdowns experienced at two major Indian mills, coupled with a planned shutdown, have eased excess supply of hot rolled coil in India. In fact, market participants tell Kallanish they calculate there will be a supply shortage from Indian mills of at least 150,000-200,000 tonnes.

"A major steel company in India faced issues at its blast furnace operations, which lasted for 5-7 days; it coincided with their planned shutdown, and at the same time another steel company also underwent the same kind of breakdown at its operations, which summed up to a production loss of around 150,000t of HRC," a reliable company source informs.

"This has kind of offset the sluggish demand prevailing in the market for the time being in India and also made India’s position strong in the export market as they do not have excess supply to negotiate for in the international market," the source adds.

According to sources, Indian structural-grade HRC offers are stable on-week at $670-680/tonne cfr Spain, Antwerp, and Italy. A few small-tonnage deals were done by Indian mills at €610/t ($670) cfr Italy this week. Meanwhile, according to a source, Indian HRC offers for 2-meter-wide material were noted at above $700/t cfr Antwerp, while another source informs offers were hovering at $720-725/t cfr Antwerp for the same width.

Speaking about the summer holidays in Europe and low offtake in the region, the source adds: "Following a brief uptick in Chinese offers, offers from other origins have also inched up, and Indian mills kind of followed in the footsteps of other origins. However, as a majority of European buyers are off on summer holidays, it is too early to predict whether these levels will sustain in the future or not."

Deals for DC-01 cold rolled coil were meanwhile heard concluding at $745-750/t cfr Antwerp and Italy.

The majority of United Arab Emirates mills have a low appetite for HRC for August shipment, a source informs. Amid the production cuts, Indian mills have distanced themselves from negotiating low numbers. Offers from trading companies for Indian HRC were meanwhile noted at $610-615/t cfr Gulf Cooperation Council.

"If all the supplies from other origins are exhausted, then GCC buyers will turn to India," a source claims, pointing to the forward bookings done by UAE customers.

Meanwhile, no recent bookings were made to Vietnam or Turkey. However, an Indian mill booked around 25,000-30,000 tonnes of re-rollable grade HRC at $592/t cfr Turkey a couple of weeks ago.

In the Indian domestic market, retail E250 grade offers were meanwhile heard at INR 55,500-56,000/t ($673). Offers for E350 and GP coils are, meanwhile, noted at INR 58,500-59,000/t and INR 64,500-65,000/t ex-Mumbai, respectively.

According to sources, Indian mills have safeguarded themselves from the sluggish demand at least for 40-45 days, meaning that even if the market goes down, they do not have material to offer at low prices.