India: SteelMint HRC export index stable w-o-w; sentiments mixed ahead of holidays

SteelMint's India HRC (SAE1006) export index remained largely stable w-o-w at $565/tonne (t) FOB east coast India. The Middle East (ME) market is less active due to the upcoming festival of Eid Al Adha. However, prices in the European and Vietnamese markets have improved slightly amidst a stronger Euro and overbooking by Vietnam-based mills.

Market-wise updates

1. Indian offers to UAE unchanged ahead of festivities: Indian mills have kept offers for HRCs (HRC SAE1006) at around $600-605/t CFR ME, stable w-o-w. The ME market is not very active. Trading is expected to remain subdued till the end of the Eid Al Adha holidays. Moreover, high inventory levels have also kept ME buyers silent. Chinese offers to the UAE have risen by $10/t w-o-w to $590/t CFR against $580/t CFR amid increase in SHFE HRC futures (October contract) w-o-w.

2. Vietnam's imported HRC offers rise w-o-w: Vietnam's imported HRC offers rose w-o-w as domestic mills' allocations got sold out. Imported Chinese-origin HRC offers into Vietnam were heard at $585/t CFR, up by around $5/t w-o-w against $580/t CFR in the preceding week. The Vietnamese market has improved, largely due to the positive impact of the upward trend in the Chinese market. Moreover, Vietnamese buyers are willing to accept higher prices. Formosa Ha Tinh (FHS) has successfully sold out its latest domestic hot rolled coil (HRC) allocations for August shipments, informed a reliable source. In addition, the Vietnamese steel market may see an upswing due to the recent reduction in interest rates by the central bank.

3. Indian HRC export offers to EU inch up amid recent deal: Indian HRC export (S275, 3mm) offers to Europe inched up w-o-w in recent deal. A private Indian steel major booked around 20,000 t of HRCs for export at $655-660/t (EUR 605/t) CFR Antwerp last weekend for end-July or early-August shipment. Fresh offers for HRCs (S275) were floated at $660/t CFR Antwerp (up $5-10/t, w-o-w). Prices showed an uptick amid the appreciation of the euro by around 1.25% w-o-w against the dollar and a slight improvement in buying sentiments, informed sources.

Outlook
Chinese settled prices of HRC futures (October 2023 contracts) on SHFE rose by RMB 30/t ($4/t) w-o-w to RMB 3,839/t ($535/t) against RMB 3809/t ($530/t) a week ago. However, the upcoming Dragon Boat festival in China this week along with Eid Al Aadha in ME next week may keep market activities silent and prices range-bound.