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Indian HRC export offers on hold amid competition from China, sluggish demand

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BigMint Bureau

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6 Aug 2024, 18:51 IST

Indian HRC export offers on hold amid competition from China, sluggish demand

Indian steel mills are holding back on hot-rolled coil (HRC) exports to Southeast Asia and the Middle East due to intense competition from China and sluggish domestic demand in these regions. Additionally, European buyers are showing caution amid summer.

Market updates

1.ME imported HRC offers remain range-bound w-o-w: HRC prices from China to the Middle East remained stable this week, with offers quoted at around $535-540/t CFR UAE. "Market activity was quiet, with little buying interest reported," hinted an Middle East (ME)-based source. Offers from Japan were last heard at $560/t CFR. On the other hand, Indian mills have continued to hold HRC export offers to ME due to higher domestic realisations.

2.HRC import offers for Vietnam fall sharply: Chinese HRC (SAE1006) export offers to Vietnam decreased by $10/t w-o-w to $505-515/t CFR HCMC against $515-520/t CFR last week. Moreover, no firm deals were heard concluded. SHFE HRC futures inched up by RMB 16/t ($2/t) w-o-w to RMB 3,504/t ($490/t) as compared to RMB 3,488/t ($488/t) in previous week. Meanwhile, on d-o-d basis the same went slightly down by RMB 17/t ($2/t) d-o-d as compared to RMB 3,521/t ($492/t) a day ago.

3. Mills uphold HRC offers to EU: Indian steel mills are not actively offering to Europe currently, last heard offers were around $650-660/t CFR Antwerp. In addition, prices of European HRC have remained largely stable in the domestic market amid seasonally slow trading activities. The market is still facing weak demand, and it is likely to stay that way or even get worse over the summer. High inventory levels are suppressing demand as customers prioritise need-based restocking due to the ongoing summer holiday.

Outlook

Intense competition from China, coupled with sluggish demand in Southeast Asia and the Middle East, will continue to hinder Indian steel mills' export prospects. However, the long-term prospects of Indian market remain promising, driven by robust domestic demand and the government's focus on infrastructure development.