India: Trade-level HRC, CRC prices edge up on ques of mills to increase tags

Trade-level hot-rolled (HR) and cold-rolled (CR) coil prices have edged up by INR 200-500/t ($2-6/t) in a few markets under assessment this week. However, others continued to remain range-bound. Supply constraints in July amid the scheduled maintenance taken by the producers are likely to normalise in the upcoming month.

SteelMint's benchmark assessment (bi-weekly) for HRC (IS2062, Gr E250, 2.5-8mm) edged up by INR 200/t ($2/t) to INR 55,500-56,500/t ($677-689/t) as against last week's levels. Similarly, CRC (IS513, Gr O, 0.9mm) prices also inched up by INR 500/t ($6/t) to INR 59,500-60,500/t ($726-738/t) in this period. (INR 1 = USD 0.0122026 ; USD 1 = INR 81.95)

Market updates:

1. Mills indicating an increase in list price tags for August sales: The market chatter about the mills indicating an increase in their list prices has again started to stir the market. This comes after a couple of private mills announced an interim hike in their price tags last week. Production had taken a hit during the month amid maintenance shutdowns which have led to limited supplies in a few regions, informed sources. " Since the beginning of the previous week, mills have been speaking about their intent to increase prices for the August 2023 sales. This has pushed distributors to quote higher prices in the traders' market," informed a western-India-based major distributor. The market is abuzz with the news that mills intend to increase list price tags by around INR 1,000/t ($12/t), shared distributors from most of the markets under assessment.

2. Export offers on hold: The weekly assessed- SteelMint's India HRC (SAE1006) export index has stayed unchanged at $570/t FOB east coast since 27 June 2023. Moreover, for the past 2-3 weeks, Indian mills have been holding back from offering in the Vietnamese or Middle East (ME) markets. The holding back of offers was primarily because of the slow demand in the ME and the constrained production by Indian mills amid the maintenance downtime. Demand in Europe too is slow amid the seasonally weak period of summer. However, participants opined that the offers to increase in the global market with the Chinese government prioritising production cuts in the second half of CY2023 (H2CY2023). This has led to an increase in SHFE HRC futures which in turn pushed the export offers for HRC (SS400) higher at $585/t FOB Rizhao as on 25 July 2023.

Indian mills are likely to come up with an increase in export offers for overseas markets in the first week of August. This green shoot in the global trade market has also motivated mills to raise domestic prices.

3. Imports that spurted till July, now turn slow: The import deals have turned scarce post the bookings for August deliveries. Good volumes were booked as imports for the June to July delivery period amid the downtrend in prices on the global platforms since April. For instance, the import volume of HRC and plates have been on a rise over the May to July period. The bulk HRC and plate import volumes reached 435,382 t in July 2023 (till 26 July), as per the vessel line up data tracked by SteelMint. It was around 215,299 t in May 2023 and 287,703 t in June 2023.

Meanwhile, there was a decline in new import bookings from June amid the prices ticking up on the global platform. However, towards the previous weekend 10,000-15,000 t of HRCs were booked for imports from Vietnam at $615-620/t CFR India. Delivery is expected by mid-September, informed sources.

Moreover, fresh import deals are unlikely to happen in the near-term as Vietnamese mills are out of allocations for August-September deliveries. South Korean and Japanese mills too are showing not much interest in the Asian markets at present and focusing on the European and Middle East markets where the offers are higher than in the Asian market despite low demand.