India: Trade-level HRC prices rise by upto INR 800/t amid market revival

• Festive season induces surge in inquiries, sales
  
  
• Indian mills resume export offers to Middle East
  
  

Hot-rolled coil (HRC) prices have experienced a significant uptick, increasing by INR 200-800/tonne (t) ($2-10/t) to INR 48,500-51,500/t ($578-614/t). In contrast, cold-rolled coil (CRC) prices remained relatively stable across different markets, at INR 56,500-59,500/t ($673-709/t). The overall trade market is demonstrating signs of recovery, as evidenced by a growing volume of inquiries leading to actual sales.

BigMint's benchmark assessment (bi-weekly) for HRCs (IS2062, Gr E250, 2.5-8 mm) increased by INR 200/t ($42/t) to INR 48,600/t ($579/t) on 8 October 2024. However, CRCs (IS513, Gr O, 0.9 mm) decreased by INR 200/t ($2/t) to INR 55,600/t ($662/t). These prices are quoted ex-Mumbai, excluding 18% GST, and are for cut-to-length (CTL) deliveries (INR 1 = USD 0.0119147 ; USD 1 = INR 83.9298).

Market updates

1. Traders' market improves: The trading market experienced a price surge amid an uptick in inquiries and a moderate volume of orders. However, confirmation remains pending for the final prices for these orders.

Notably, the southern markets experienced limited activity due to the religious holiday from 9 to 13 October. During this period, minimal work is expected to take place.

"The market is somewhat bullish: we have received a good number of enquiries and witnessed robust sales volume. These can be considered festive season-induced sales, as people tend to complete works before Diwali," a market participant informed BigMint. "The real sustainability check for the market will be after Diwali," he added.

2. Import trends: The cumulative import volume, based on BigMint's vessel line-up data, stood at 262,296 t till 7 October 2024. It was 776,835 t in September and 627,426 t in August. However, an additional 198,131 t is expected in October. A deal for 5,000 t of HRCs from South Korea was heard concluded at $530/t CFR Chennai for November 2024.

3. Export trends: Indian steel mills resumed their export offers to the Middle East (ME) after a significant hiatus, spurred by recent market developments. This resurgence coincides with increased Chinese export offers and the Chinese National Day holidays (1-7 October 2024), which may have temporarily curtailed Chinese domestic consumption.

While Indian HRC exports to the Middle East witnessed a revival, offers to the European Union (EU) remained relatively stable, reflecting sluggishness in the current EU market. India has also made substantial progress in utilising its allocated HRCs quota for the third quarter of 2024 (Q3CY'24), with approximately 80% of the total quota of 301,704 t consumed.

Meanwhile, in Vietnam, leading steel manufacturers, such as Formosa Ha Tinh (FHS) and the Hoa Phat Group, announced a price increase for domestic HRC sales in December, with FHS's offers reaching around $545-555/t CIF Ho Chi Minh City. This price adjustment follows similar moves by other regional steel producers, indicating a tightening market for HRCs in Southeast Asia.

Outlook

Given the current bullish market sentiment and increasing demand, HRC prices are likely to continue rising in the short term. The market's ability to sustain the current momentum will depend on various economic and industry-specific factors. It will be essential to monitor global economic conditions and competition from imports.