Indian mills prioritise domestic market over HRC exports amid higher realisations

Indian mills have continued to remain silent in floating hot rolled coil (HRC) export offers for Southeast Asia and the Middle East (ME) for a while. Better realisation in the domestic market has meant that mills are more interested in supplying domestically rather than exporting. "No offers from Indian mills as of now, domestic prices are higher than export realisation," informed a source. Moreover, the European Union (EU) market is silent while geo-political issues in ME along with competitive offers from China and Japan have kept Indian mills on the sidelines.

Market updates

1. Chinese HRC offers for ME stable w-o-w: Chinese HRC (SAE1006) export offers to the ME were assessed at $570-575/t CFR UAE. Moreover, offers for Japan-origin HRCs were at $580-585/t CFR. A deal was heard concluded of around 20,000 t of HRCs from Japan at $580/t CFR for end November-early December delivery, hinted sources.

2. Vietnam's HRC import offers range-bound: Imported offers for China-origin hot-rolled coils (HRC SAE1006) into Vietnam range-bound w-o-w to $550-555/t CFR Vietnam amid limited trade activities and competitive domestic prices. Moreover, Formosa Ha Tinh (FHS) has further reduced HRC offers (SAE 1006, skinpass) for December shipment by around $10-20/t CIF Ho Chi Minh m-o-m towards last week. Post revision, prices for skinpass HRC are in the range of $560-570/t CIF, depending on size of orders.

3. Mills hold HRC offers to EU: Indian mills continue to hold HRC export (S275, 3mm) offers to Europe. In addition, market demand remained weak with no sign of improvement in sight. Lead times are short in domestic market, some as short as four weeks, indicating that domestic mills have thin order books. Furthermore, Slow demand from the automotive and construction industries was also a major concern for the market.

Outlook

Market participants are waiting for list price announcement from Indian mills for November. In addition, mills are having limited HRC allocations. Subdued global demand might keep Indian mills out of the export market for the time being.