Indian HRC exports offers on hold amid competitive Chinese offers
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Indian steel mills continue to hold export offers for hot-rolled coil (HRC) to Southeast Asia and the Middle Eastern countries. Intense competition from Chinese suppliers and sluggish domestic demand in importing geographies have discouraged exports. Additionally, the ongoing summer season in the Middle East and Europe has dampened overall trade activity.
Market updates
1.ME imported HRC offers fall: Chinese steelmakers reduced their export prices for HRC to the Middle East this week. Prices dropped by $10/t compared to the previous week, reaching a range of $535-540/t CFR UAE against $545-550/t. Despite the lower prices, no deals were finalised. In addition, sources from the ME reported that trade has slowed down due to the summer season. Additionally, there were no firm offers received from Japan, India, or South Korea.
2.HRC import offers for Vietnam inch down: China-origin HRC (SAE1006) export offers to Vietnam inched down by $5/t w-o-w to $515-520/t CFR HCMC as of last week amid low market demand. Moreover, no firm deals were heard concluded. SHFE HRC futures edged down by RMB 46/t ($6/t) d-o-d to RMB 3,488/t ($481/t) as compared to RMB 3,534/t ($487/t) a day ago. Furthermore, the same fell by RMB 124/t ($17/t) w-o-w against RMB 3,612/t ($498/t).
3.Mills hold back 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 for European HRC have remained mostly steady in the domestic market amid slow trading activity due to peak summer holidays. The market is currently facing significantly low levels of demand and high inventory levels. Prices are under pressure and may decline further unless steel mills implement production cuts to balance supply and demand.
Outlook
HRC demand in the region is anticipated to remain subdued throughout the summer due to seasonal factors. Prices are likely to face downward pressure as a result. Although a gradual demand uptick is expected as the season concludes, a robust recovery will necessitate a wider economic improvement and a correction in the supply-demand imbalance.
