India: SteelMint HRC export index falls $7/t w-o-w

• EU likely to face coil supply disruption in April-May
  
  
• Firm bids from Middle East, Vietnam absent, Chinese offers fall
  
  
• Hoa Phat lowers monthly HRC prices for May'23
  
  

SteelMint's India HRC (SAE1006) export index fell w-o-w by $7/t to $705/t FOB east coast this week against $712/t last week. Market activities in the Middle East and Vietnam have slowed down during the Ramadan month and absence of active buying interest. However, bids in the majority of traditional export destinations have come down tracking the fall in Chinese prices this week.

Indian mills are offering HRC for May-June shipments, but no firm deal was reported.

Rationale: No confirmed deal (T1) was reported in this publishing window. Seven indicative prices were considered as T2 inputs out of six inputs received. The final price was an average of T1 and T2 inputs, which stood at $705/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) export offers for the UAE market remained largely range-bound this week. Offers stood at around $735-740/t CFR. Limited procurement from UAE buyers due to Ramadan led to lower trade activities in the UAE market, informed sources. Moreover, offers from China dropped by $5-10/t w-o-w to $680/t CFR this week.

2. Vietnam's Hoa Phat cuts offers: Vietnamese steel major Hoa Phat has lowered its monthly HRC (SAE1006, non-skinpass) prices for May and early-June sales by VND 300/kg, sources informed SteelMint. Weakening domestic demand and decreasing Chinese HRC offers for Vietnam are the key reasons behind the decline. After revision, effective prices stand at $680/t CIF HCMC or VND 16,030/kg, excluding VAT.

3. Indian export prices for EU stable: Indian HRC export (S275) offers remained stable at $830-840/t CFR Antwerp. On the other hand, domestic coil supplies are likely to take a hit. As per reports, ArcelorMittal may witness a delay in domestic deliveries across Europe due to the fire in Northern Spain and France which impacted two blast furnaces over the last two weeks. Moreover, allocations for fresh orderbook will be reduced as several weeks will be needed to get back to normal production levels. Along with this longer lead times is also a concern. Supply disruptions may provide an opportunity to Indian mills to raise HRC offers in the coming weeks.

Outlook: Indian Mills are offering HRC and CRC for April and early-May shipments but are worried about the price fall. Hence mills are in wait-and-watch mode amid the rise in domestic HRC offers as domestic realisations have improved. Also, HRC futures for May 2023 delivery on the Shanghai Futures Exchange (SHFE) decreased by RMB 74/t ($11/t) d-o-d to RMB 4,158/t ($604/t), which has weakened sentiments further.