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Indian HRC export market remains inactive as mills hold offers

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BigMint Bureau

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30 Apr 2024, 20:08 IST

Indian HRC export market remains inactive as mills hold offers

Indian HRC export market remained inactive as mills withheld offers for Southeast Asia and the Middle East (ME) for yet another week. Mills are currently prioritising the domestic market and has limited export allocations for hot rolled coils (HRC).

For the Middle East, imported HRC offers from China and Japan remain very competitive, few deals have been reported from both the origins last week. Lower offers from other origins has further discouraged Indian mills from exporting to the region. Additionally, slow demand in the European Union (EU) and Southeast Asian markets has led Indian mills to hold export offers. For now, they are focusing towards domestic market due to better price realisation.

Market updates:

1. HRC import offers of ME increase: Chinese HRC offers (grades: S235 and S275) rose by $10-15/t w-o-w to $575/t CFR UAE, compared to $560-570/t last week. A deal of 12,000 tonnes (t) was reportedly concluded at similar prices. Moreover, Japanese HRC offers also increased by $10/t w-o-w to $580-590/t CFR UAE, up from $570-575/t CFR UAE a week ago. A deal of around 50,000-60,000 t was reportedly concluded for June 2024 shipments at the same price range. No fresh offers have been heard from Indian mills and the last heard price indications were around $595/t CFR UAE.

2. Vietnam's import offers rise w-o-w: Imported offers of China-origin HRC (SAE1006) into Vietnam rose by $5/t w-o-w to $555-565/t CFR Vietnam. Prices rose due to the recent news of tax scam that allows Chinese traders to trim VAT payments. However, Shanghai Futures Exchange (SHFE) HRC futures remained stable w-o-w at RMB 3,818/t ($527/t) on 30 April. In addition, futures remained unchanged d-o-d ahead of Labour Day holidays in China from 1-5 May, 2024.

3. Indian mills continue to hold HRC offers to EU: Indian steel mills continued to hold their HRC export offers (S275, 3mm) to Europe this week as well. However, indicative prices are around $625-635/t CFR Antwerp ($575-585/t) FOB east coast India. Supported by restocking and a weak dollar, domestic prices in EU rose after the Euro to US dollar exchange rate changed. Buyers also held off on overseas purchases due to long lead times. This ended the downward trend in European prices that had been in place since January. Despite limited demand, mills are expected to raise prices soon due to the lack of import competition.

Outlook

Market participants in China will remain on holidays from 1 to 5 May on account of Labor Day holidays. In the absence of Chinese sellers, Indian mills may start offering for exports. However, maintenance scheduled in May and the focus on the domestic market are likely to continue hindering export activity, keeping market sentiments mixed. Moreover, market demand in Southeast Asia remains weak while geo-political issues in ME persists.