India: HRC export index inches down by $4/t w-o-w amid low buying interest

SteelMint's India HRC (SAE1006) export index stood at $712/t FOB east coast this week, down by $4/t FOB w-o-w. The index fell on the back of low buying interest in the overseas market, especially from the UAE. In addition, Vietnamese buyers are inclined towards domestic supplies despite higher offers. Indian mills, on the other hand, held back offers amid low realisations from the region.

Rationale: No confirmed deal (T1) was reported in this publishing window. Thirteen indicative prices were considered as T2 inputs. The final price was an average of T1 and T2 inputs, which stood at $712/t FOB. CFR prices were converted to FOB by deducting freight costs from the buyer or seller.

Market-wise updates:

1. Offers for UAE range-bound w-o-w: Indian HRC (SAE1006) offers remained largely range-bound this week in the UAE market. Offers heard this week stood at around $740-750/t CFR as against $740-760/t CFR a week back. Buying interest has turned low in the market as the Chinese HRC futures market turned volatile late last week. Moreover, offers from China also dropped by $5/t w-o-w to $705-710/t CFR this week. "The market is slow with respect to HRC imports as current levels are not getting accepted by buyers. Thus, no deal was concluded at these levels," informed a local source.

2. Vietnamese buyers lean towards domestic supplies: Vietnamese buyers are more inclined towards domestic supplies amid shorter delivery lead times. Formosa Ha Tinh (FHS) announced its domestic HRCs (SAE1006, skin passed) prices at $732/t CIF Ho Chi Minh City (HCMC) for May and early June 2023 sales.

It can be recalled here that Vietnamese buyers had consumed domestically produced HRCs for April and early May 2023 deliveries despite higher prices.

3. Indian HRC export prices stay firm in the EU: Indian mills have been actively scouting the European market for exports since the beginning of CY2023 amid an improved demand in the latter. Moreover, offers were seen rising in successive deals with the recent deal heard about 10 days back at $830/t CFR for end-April or an early-May shipment. Offers have continued to hover around $830-840/t CFR Antwerp this week. No deals were heard booked at these levels.

Outlook
Indian HRC export offers are likely to stay range-bound in the near term amid increasing concerns hovering around recession in the global economies, sources shared. Chinese HRC futures (May 2023 contracts) on SHFE settled at RMB 4,301/t ($626/t) on 21 March, down by RMB 162/t ($24/t) w-o-w.