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Indian HRC export market remains dull on weaker global sentiments

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BigMint Bureau

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11 Jun 2024, 19:17 IST

Indian HRC export market remains dull on weaker global sentiments

Indian hot-rolled coils (HRC) exports to Southeast Asia and the Middle East (ME) remained quiet amid competitive Chinese prices and weaker global market sentiments. Chinese HRC export offers to ME region has dropped amid sharp fall in Shanghai Futures Exchange (SHFE) HRC futures. While, Japan is also offering at similar levels to ME and few deals were heard reported. In the European market, buyers are now more inclined towards domestic HRC as local mills are quite aggressive informed a reliable source.

Market updates:

1. ME imported HRC offers drop w-o-w amid recent deals: Chinese HRC (grades S235 and S275) export offers to ME declined by $5/t w-o-w. Offers are now around $565-570/t CFR UAE, down from $570-575/t CFR UAE last week, no deals were heard concluded likely due to the Dragon Boat Festival on 10 June, 2024. Moreover, Japanese HRC offers to ME decreased by $10-15/t to $570-575/t CFR UAE against $580-590/t CFR UAE on 29 May 2024. Two major mills in ME have booked HRCs of 25,000 t and 10,000 t for August 2024 shipments at similar price levels. Furthermore, Indian mills have continued to hold HRC export offers to ME.

2. Vietnam's import offers inch down w-o-w: Imported offers of China-origin HRC (SAE1006) into Vietnam inched down w-o-w to $550-555/t CFR against $555-565/t CFR Vietnam. Prices fell amid sharp fall in China's SHFE HRC futures. It is to be noted that SHFE HRC futures fell by RMB 52/t ($7/t) d-o-d to RMB 3,776/t ($521/t) against RMB 3,828/t ($528/t) a day ago. Moreover, on w-o-w basis the same edged down by RMB 19/t ($3/t) w-o-w as compared to RMB 3,795/t ($523/t) a week ago. In addition, Vietnam's steel major Hoa Phat has reduced its monthly HRC (SAE1006, non-skinpassed) prices by around $10-15/t for August, 2024 sales, sources informed BigMint. Post-revision, effective prices stand at approximately $565/t or VND 14,435,000/t for Southern region, excluding VAT, in response to slow domestic demand in the region.

3. HRC offers to EU remain quiet: Indian steel mills are not actively offering for HRC exports (S275, 3mm) to Europe, indicative offers are heard around $670/t CFR Antwerp, which is not viable in the market as domestic mills in Europe are quite aggressive with competitive domestic prices. "Only a steel major in India is offering this price but buyers are currently reluctant to purchase at this level" hinted a source. Moreover, European buyers are cautious in restocking due to the safeguard measures and slow end-user demand. However, upcoming maintenance shutdowns at European mills during the summer might offer some temporary price stability.

Outlook

Indian HRC exporters are likely to face continued pressure in the near term due to slow demand in key regions and aggressive pricing from China and Japan. Chinese participants have just returned after Dragon Boat Festival holidays and are awaiting Baosteel price announcement. Moreover, Eid-ul-adha holidays in ME may lower trade activities in the region.