Indian mills continue to hold HRC export offers amid competition from China

Indian steel mills have continued to keep on hold hot-rolled coil (HRC) export offers to Southeast Asia and the Middle East (ME) because of strong competition from China and weak demand in different key steel importing regions. Even European buyers are cautious during the summer season.

Market updates

1.HRC offers to ME fall w-o-w: China's export offers of HRC (grades S235 and S275) to the ME fell by $15-20/t w-o-w, reaching $510-515/t CFR UAE, down from $525-535/t CFR UAE, influenced by decreasing SHFE futures. Moreover, a deal of around 26,000 t has been heard concluded at similar levels for Sept'24 shipments. Furthermore, no offers have been heard from Japan, India, or South Korea. SHFE HRC futures have fallen by RMB 166/t ($23/t) w-o-w to RMB 3,191/t ($447/t) compared to RMB 3,357/t ($470/t) last week.

2.Offers to Vietnam drop: Chinese HRC (SAE1006) export offers to Vietnam dropped by $5-10/t w-o-w to $495-500/t CFR HCMC against $500-510/t/t CFR last week. No deal was heard concluded. Formosa Ha Tinh (FHS), a major Vietnamese steel producer, has significantly lowered its HRC prices for September and October shipments. The price reduction, amounting to approximately $40/t, is effective on a CIF basis. As a result of this adjustment, the cost of SAE1006 skin-pass HRCs in HCMC has dropped from $570-580/t to $528-540/t. Non-skin pass coils are now ranging at $520-530/t, depending on the order volume.

3.Mills resume offers for EU: Indian steel mills have resumed HRC export offers to Europe. Current offers are around $620-630/t CFR Antwerp but no booking was heard this week amid the EU's anti-dumping investigation. However, last week, a booking of around 10,000 t of HRCs was heard concluded from an Indian steel major. The European domestic HRC market is currently flat due to low seasonal demand. Domestic producers are aiming for price hikes post summer, but weak demand from key sectors like auto and construction poses a challenge.

Outlook

Indian mills face an increasing competition in the export market. Intense competition from China, weak demand in key regions, and the ongoing EU investigation have created a challenging environment. Adapting to the competitive landscape and exploring strategic options will be crucial for Indian mills to maintain a foothold in the export market.