BigMint: India HRC export index largely stable in recent deals to ME, Chinese holidays

• Chinese HRC export offers drop w-o-w
  
  
• SHFE HRC futures fall to over 2-month low
  
  
• Recent deals for ME region reported from India
  
  

BigMint's India HRC (SAE 1006) export index (for the Middle East and Vietnam) remained range-bound w-o-w at $599/t FOB against $600/tonne (t) FOB east coast India, amid recent deals concluded for the Middle East (ME) region. Global sentiments weakened as China's Shanghai Futures Exchange (SHFE) fell sharply w-o-w. In addition, the depreciation of Euro versus dollar also kept market sentiments slowed down.

"Chinese HRC offers from traders have fallen this week. However, mills are optimistic that HRC export offers may rebound post-holidays, which may support Indian origin offers too," said a trader.

Rationale: One confirmed deal (T1) was reported in this publishing window. Nine indicative prices were considered as T2 inputs out of ten inputs received. The final price was an average of T1 and T2 inputs, which stood at $599/t FOB. CFR prices were converted to FOB by deducting freight costs from the buyer or seller.

Market updates:

1. Indian HRC export offers to ME stable w-o-w amid recent deal: Indian steel mills' offers to ME remained range-bound w-o-w to $630-635/t CFR. An Indian steel major has reportedly booked 30,000 t of HRCs at $630/t CFR for March shipments, informed sources. Chinese prices to ME inched down by $5/t w-o-w to $605-610/t CFR UAE.

2. Chinese HRC futures fall to over 2-months low - SHFE HRC futures sharply fell by RMB119/t ($17/t) w-o-w to RMB 3,952/t ($552/t) against RMB 4,071/t ($570/t) amidst subdued market sentiments ahead of New Year holidays. "There have been many offers from Vietnam lately", informed an ME based source. Furthermore, Vietnamese HRC offers were heard around $635-645/t CFR UAE.

3. Indian HRC export offers to EU fall marginally w-o-w: Indian HRC exports to Europe (S275, 3mm) dropped by $5/t w-o-w. Current offers are around $715-720/t CFR Antwerp ($665-670/t FOB east-coast India) against $720-725/t CFR Antwerp last week. Buyers are bidding at $690-700/t CFR levels, informed sources.

Domestic HRC prices are still on higher side. Buyers remained cautious due to high inventories and weak end-user demand, leading them to postpone restocking. In addition, European currency saw a depreciation of about 1.9% m-o-m against dollar. Euro to USD conversion currently stands at 0.93 versus 0.91 seen a month ago.

4. Indian HRC price indications to Vietnam stable w-o-w: Indian HRC export price indications to Vietnam remained stable w-o-w at $610-615/t CFR Ho Chi Minh City, Vietnam. However, trade activities remained slow, informed sources. Chinese HRC (SAE1006) offers dropped w-o-w to around $595-600/t CFR with lunar holidays approaching in China.

In addition, Vietnam's HRC import market sentiments remained weak amid slow demand and competitive domestic prices. Vietnamese steel major Hoa Phat has dropped monthly HRC (SAE1006, non-skinpass) prices for April-May, 2024 sales by $30/t m-o-m. Post-revision, effective prices were at VND 14,852/kg or $610/t CIF HCMC (southern region) against previous price of VND 15,653/kg ($640/t) excluding VAT.

Outlook:

The Chinese market participants will be on holiday for a total of eight days from 10 to 17 February 2024 to celebrate the Lunar New Year. Indian mills may raise HRC export offers in absence of Chinese competitive prices. However, global market sentiments are weak and Vietnamese mills are also offering for HRC exports amid weak domestic demand.