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Indian HRC exports continue to stay quiet

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BigMint Bureau

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28 May 2024, 19:02 IST

Indian HRC exports continue to stay quiet

China's SHFE futures remain volatile

Weaker global market sentiments

Hot-rolled coils (HRC) exports from India to Southeast Asia and the Middle East (ME) remained quiet for another week as steel mills focused on the domestic market. Driven by higher realisation in domestic market and limited export allocations mills are not offering for exports. Moreover, market demand in ME and Europe are slow. "The market remains steady with little movement. Imported HRC offers from China and Japan are largely stable," informed an ME-based source. In addition, Chinese Shanghai Futures Exchange (SHFE) HRC futures remained volatile.

Market updates:

1.Chinese HRC export offers to ME stable w-o-w: China's HRC (grades S235 and S275) export offers to ME remained largely stable this week. The current offers are ranging at $580-585/t CFR UAE. While, Japanese offers were also in a similar range of $580-590/t CFR UAE. In addition, no firm deals were heard reported as market demand in the region is weak with limited trade activities. Meanwhile, Indian mills are still out of the exports market and are not offering to the ME region.

2. Vietnam's import offers range-bound w-o-w: Imported offers of China-origin HRC (SAE1006) into Vietnam remained range-bound w-o-w at $555-565/t CFR Vietnam. Buyers in the region is cautious due to volatile China's SHFE HRC futures. It is to be noted that SHFE HRC futures remained range-bound on d-o-d basis at RMB 3,887/t ($536/t) on 28 May 2024. However, the same went up by RMB 23/t ($3/t) w-o-w against RMB 3,864/t ($533/t) on 21 May 2024. In addition, a Vietnamese steel major has offered discounted prices by $15-20/t CIF HCMC, however, it is yet to be confirmed by officials.

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, prioritising domestic market. In addition, European steel mills are aggressively competing with imports by matching import prices. This shift comes after several weeks of stable domestic prices, as mills' attempts to raise prices failed due to weak demand and an oversupplied market. While some restocking is expected in mid-June 2024, sources predict limited buying volumes.

Outlook

With a focus on domestic sales and weak global market sentiments, Indian HRC exports are unlikely to pick up in the immediate future. A potential shift could occur if domestic demand softens or export allocations increase. However, this would also depend on global market demand.