Key facts
- India's October-December EU quota for hot-rolled coil (HRC) is projected to be filled quickly.
- EU importers have already booked a significant volume of Indian HRC for July and August shipment.
- India's tariff-free HRC allocation to the EU was reduced by 34% for the current quarter.
- Indian mills are actively seeking to export surplus volumes to the EU due to weak domestic demand.
- Recent HRC bookings for the EU market were priced between $630-650/t cfr.
India's quota for hot-rolled coil (HRC) exports to the European Union for the October-December period is expected to be filled rapidly, according to market participants. Major Indian mills are increasing sales to the EU following new import measures that took effect on July 1.
At least 100,000 tonnes of Indian HRC are anticipated to pass through customs once the new quotas open in October. Market observers estimate that EU importers have already secured between 125,000 and 200,000 tonnes of Indian HRC in recent weeks, with most of this volume slated for shipment in July and August. Additional deals are currently under negotiation.
Under the new import regime, India's tariff-free HRC allocation was reduced by 34% to 149,319 tonnes per quarter, effective from July 1. As of July 17, approximately 68% of this quota had been utilized, leaving about 47,000 tonnes available for the current quarter.
The shared free-trade agreement (FTA) quota pool, which operates on a first-come, first-served basis, is expected to be largely used by Turkey in the current quarter. However, it could become accessible to India in the subsequent quarter, though this remains uncertain due to potential competition from Turkey.
Indian mills are reportedly aiming for faster shipments to clear some volumes within the current quarter. Suppliers are now focused on filling the October-December allocations and may even slightly exceed the quota, according to an Indian steel mill source. Recent bookings have been concluded at prices ranging from $630 to $650 per tonne cfr EU.
For Indian mills, the EU market offers a crucial opportunity to export surplus volumes during the monsoon season, a period typically characterized by softer domestic demand. Domestic prices in India are currently under pressure due to low demand, with other export markets like Vietnam and the Middle East also showing weakness.
The Argus weekly assessment for Indian domestic HRC (2.5-4mm material) stood at 57,350 rupees/t ($594/t) ex-Mumbai on July 17, down from a multi-year high reached in early April. Some market participants view the current surge in Indian shipments to the EU as a temporary tactical move rather than a sustainable trend. Trading activity may slow as EU buyers become cautious about the depletion of October-December quotas and ahead of holidays in Italy.