India: SteelMint HRC export index range-bound in absence of active trade

SteelMint's India HRC (SAE1006) export index remained range-bound w-o-w at $570-575/tonne (t) FOB east coast India. The Middle East (ME) market participants returned from the Eid Holidays this week. However, buying activities remained slow from this region. Offers to the European (EU) market also remained stable w-o-w amid subdued demand.

Market-wise updates

1. Indian offers to UAE largely stable w-o-w: Indian mills are not actively offering in the ME market. However, last heard, hot rolled coil (SAE1006) offers were at around $605-610/t CFR UAE, largely stable w-o-w. The ME market was closed last week on account of Eid-al-Adha holidays (28 June to 2 July). However, market activities are quiet slow even after participants resumed trade from 3 July.

Chinese offers to the Middle East, meanwhile, rose by around $15-20/t CFR w-o-w to $600/t CFR ME against $585/t CFR a week ago. Chinese prices rose amid the hike in Shanghai Futures Exchange (SHFE) futures. "The futures are fluctuating almost daily," said a source.

2. Vietnam's imported HRC offers fall in recent deal from China: Vietnam's imported HRC (SAE1006) offers from China dropped by around $20/t w-o-w to $555-565/t against $580-585/t in the preceding week. A Vietnamese steel major is reported to have concluded an import deal for 30,000 t of HRCs (SAE1006) from China last week. However, the deal was concluded at a reduced price of $560-563/t CFR, indicating that certain Chinese mills have lowered their HRC export offers. Moreover, buying activity in the Vietnamese market has shown improvement amid restocking. However, Vietnam's steel major, Hoa Phat, has hiked monthly HRC (SAE1006, non-skinpasses) prices by VND 3,00/kg ($8/t) for July and early-August sales. Post-revision, effective prices stand at $578/t CIF HCMC or VND 13,700/kg, excluding VAT.

3. Indian HRC export offers to EU range-bound: Indian HRC export (S275, 3mm) offers to Europe remained range-bound w-o-w at $660-670/t CFR Antwerp. Market conditions were largely unchanged due to slow end-user demand and fewer trades in the country. "The market is a bit sluggish. European buyers will go on summer holidays from mid-July and restocking was expected but demand is actually poor," informed sources. The limited buying interest in the European region kept prices stable w-o-w. In addition, most market participants believe prices are expected to be largely stable and thus the market will likely remain silent this week.

Outlook

Some market participants opine that export offers have largely bottomed out and are less likely to show any significant downward correction in the near term.

The SHFE HRCs (October 2023 contracts) rose by RMB 64/t ($9/t) w-o-w to RMB 3,868/t ($536/t) against RMB 3,804/t ($527/t) which led to mixed sentiments in the market.

On the other hand, steel production cuts by 30% in China's Tangshan region in a bid to improve air quality have led to a slump in iron ore futures amid fears of a drop in demand. This in turn raises questions about the stability of the market in the near future.