Indian HRC exporters remain silent amid subdued global sentiments

Indian mills continue to hold hot rolled coil (HRC) export offers for Southeast Asia and the Middle East (ME) for over a month now. Major mills announced a hike in domestic HRC prices in the beginning of the month. However, "mills are absolutely silent about HRC export offers considering better realisation in the domestic market", informed sources. In addition, competitive offers from China to ME amid holidays and lower domestic offers in the EU have further sidelined Indian HRC suppliers.

Market updates

1.Chinese HRC prices for ME drop: Chinese HRC (SAE1006) export offers to the ME dropped around $15/t w-o-w to $560-570/t CFR UAE against $575-580/t CFR UAE a week ago. Prices dropped as demand in the ME is poor amid the recent escalation of violence in the region as well as lower SHFE HRC future prices after Chinese holidays. However, Chinese prices are likely to go up in the coming weeks, hinted sources. In addition, China's Shanghai Futures Exchange (SHFE) HRC futures rose by RMB 34/t ($5/t) d-o-d to RMB 3775/t ($516/t) against RMB 3741/t ($512/t) for January contract.

2. Vietnam's HRC import offers range-bound: Imported HRC offers for China-origin hot-rolled coils (HRCs, SAE1006) into Vietnam remain range-bound w-o-w at $555-560/t CFR. Market activity in Vietnam remained sluggish and participants were waiting for Formosa Ha Tinh's (FHS) price announcement. Moreover, the Chinese steel market remained slow amid the Golden Week holidays.

3. Mills hold HRC offers to EU: Indian mills continue to held HRC export (S275, 3mm) offers to Europe. Demand for imported HRC is low in the EU amid lower domestic prices. In addition, lead times for imported HRC are significantly longer than HRC offered by European mills. As a result, European buyers have switched from overseas to domestic HRC. Moreover, the EU market has sufficient stocks and restocking is not expected to start before November, as demand from end users continue to remain weak.

Outlook
Chinese HRC offers are likely to improve in the coming weeks, while Indian mills might further increase domestic HRC prices ahead of the festive season due to the rise in raw material prices.