India: BigMint HRC export index falls to 7-month low in absence of active trades

BigMint's India HRC (SAE 1006) export index (for the Middle East and Vietnam) dropped by $15/tonne (t) to $575 FOB east coast India against $590/t FOB last week. The index has fallen to a seven-month low as these levels were last seen in end August 2023. Offers fell amid the drop in Chinese quotes and subdued market activity in the Middle East amid the Holy Ramadan month. Moreover, global market activities continued to remain limited.

Taiwan's China Steel Corporation (CSC) has rolled over steel prices for April sales. Prices of HRCs, HR plates, CRCs and hot-dipped galvanised steel coils remained unchanged. CSC kept prices unchanged in line with Baosteel. Moreover, Tokyo Steel, Japan's leading electric arc furnace steelmaker, maintained its prices for HRCs (1.7-22mm), rebar, and H-beams for April 2024 sales.

Market updates

1. Vietnam imported HRC offers subdued: Imported HRC offers to Vietnam dropped by around $15/t w-o-w from China. Offers for Chinese HRC (SAE1006) were heard around $560-565/t CFR Vietnam against last week's $565-575/t CFR. Moreover, Chinese's trading companies are offering positioned HRCs at further discounted prices of around $530/t CFR. Weakening Vietnamese demand and Formosa's HRC price reduction for May-June deliveries have pressured Chinese steelmakers to lower their offers.

In addition, Indian HRC indicative offers also fell by around $10/t w-o-w, ranging at $595/t CFR HCMC.

2. Imported HRC market in ME quiet amid Ramadan: Indian HRC exports to the ME also dipped by $10/t CFR to $610/t CFR, down from $620-625/t CFR w-o-w. However, no deals were heard concluded. Chinese hot-rolled coil (HRC) exports offers to the Middle East (ME) have declined this week. The offers from tier-1 mills fell by $20-25/t CFR to $570-575/t CFR, down from $590-600/t the prior week. In addition, tier-2 mills also saw a decrease of $10-15/t, with current offers hovering at around $560-565/t CFR compared to $570-580/t last week. Additionally, a recent booking of positioned cargo for around 10,000 t was reported at similar price levels.

3. Lower bids in EU weigh on imported HRC offers: Indian HRC export prices to Europe (S275, 3mm) declined by around $20/t w-o-w amid lower demand in the European market. Current offers are at $640-650/t CFR Antwerp ($590-600/t FOB east-coast India) against $660-670/t CFR Antwerp last week. Offers fell due to weak sentiment and low demand in the European market. Moreover, buyers are waiting for offers to reach EUR 580-590/t CFR levels.

Outlook

Steel prices in China's SHFE futures market have been falling for nearly two months and have caused concern among industry specialists. However, there are signs of a possible turnaround. Weaker macro-economic indicators in China kept steel futures under pressure. Chinese Shanghai Futures Exchange (SHFE) showed a downward trend in the previous week, and this decline is attributed to weaker macro-economic indicators. SHFE HRC futures fell by RMB 99/t ($14/t) w-o-w to RMB 3,699 ($514/t) on 15 March 2024 against RMB 3,798 ($528/t) on 11 March 2024.

Starting yesterday, futures prices began to rise after major steel producing provinces in China announced a coordinated effort to halt the price slide. However, the same increased on d-o-d basis by RMB 83/t ($12/t) to RMB 3,761/t ($522/t) as compared to RMB 3,678/t ($511/t) on 18 March 2024. It would be interesting to see if the price recovery sustains.