India: HRC export index continues to remain stable; mills withhold offers

SteelMint's India HRC (SAE1006) export index continued to remain stable w-o-w at $570-575/tonne (t) FOB east coast India. "Indian mills are holding back HRC export offers amid better realisation in the domestic market," informed sources. Major mills scheduled maintenance shutdown in late-July which is generally taken in August. Thus, no HRC offers were heard from India to the Middle East (ME) and the European Union (EU) considering limited allocations from mills. In addition, the EU market is silent amid the summer holidays.

Market-wise updates

1. Chinese offers fall in Middle East market: Chinese HRC (SAE1006) export offers to the ME market fell by $20/t w-o-w to around $585-595/t CFR UAE against $605-610/t CFR last week. Prices fell amid poor market sentiments in China due to the typhoon as well as sharp decrease in Chinese SHFE HRC futures (October contract). In addition, trading activities in the ME market is also silent due to subdued demand while Indian mills are not offering here. Last indicative offers for hot rolled coils (SAE1006) were at around $600-610/t CFR UAE and no new offers were heard recently.

2. Vietnam's imported HRC offers fall w-o-w, market awaits Formosa price revision: Imported offers of China-origin hot-rolled coils (HRC SAE1006) into Vietnam fell by $10-15/ t w-o-w to $580-585/t CFR against $590-600/t CFR last week. The strong anticipation over the macro policies in the Chinese market seems to be ebbing. In addition, demand in Vietnam is stable, and traders are seen offering positioned cargo at lower prices, which has further slowed down market sentiments. However, Vietnamese steel major Hoa Phat raised monthly HRC (SAE1006, non-skin-passed) prices by a sharp VND 490/kg ($20/t) for end-September, 2023 and early-October 2023 sales. Post-revision, effective prices stand at $600/t CIF HCMC or VND 14,220/kg, excluding VAT.

3. European HRC market quiet; no offers from Indian mills: No offers were heard from Indian mills for Europe again this week. Last heard offers for HRCs (S275, 3mm) were at around $675-680/t CFR Antwerp. Trading activity in the European market remained absent. In addition, Europe is expected to remain quiet in August amid maintenance works and summer stoppages at suppliers end. Moreover, EU buyers have sufficient stock. Meanwhile, Indian mills have limited allocations.

4. Indian mills likely to raise HRC export offers for Nepal: An Indian steel major has booked 13,000 t of HRCs for exports to Nepal at $650-655/t CFR last week for September 2023 delivery. Another steel major has booked around 8,000 t of HRCs at $660/t CFR Raxaul border. "Indian mills are cautious amid the restricted availability and pendency of rakes," informed sources. Fresh offers for HRC (SAE1006) are around 660-665/t CFR Raxaul border for September 2023 delivery.

Outlook
Indian mills are currently not offering in the overseas market. However, we may hear new export offers in the coming week. Domestic prices in India are still above the global offers. Hence, Indian mills might look for higher quotes in the near term.