SteelMint: Decline in overseas bids weighs further on Indian HRC export index

• SteelMint's India HRC export index further down by $39/t w-o-w
  
  
• Bid offer disparity, competitive offers from China, CIS weigh on offers
  
  
• Absence of firm bids from European, Middle East markets amid subdued demand
  
  

SteelMint's India HRC export index dropped to $821/t FOB east coast, contrasted against last week's $860/t FOB level, a drop of $39/t w-o-w. The decline in bids from Vietnam, Europe and offers to the Middle East market weighed on the index this week.

Market-wise highlights

1. Buyers move to sidelines in UAE in anticipation of further drop in offers: Buyers in the Middle East are holding back in anticipation of further decline in prices. "There are no bids lately from the UAE market, where buyers are showing limited interest," shared trade channel sources. This weighed on the offers from both Indian and Chinese mills. The indicative offers from India dropped to $880-900/t CFR as against $890-920/t CFR previously, whereas those from China stand at $880-900/t CFR compared to $890-900/t CFR last week.

2. Offers to EU drop steeply amid bid-offer disparity: Price indications to the EU market for S275 grade dropped steeply to $1,000/t CFR this week in contrast with last week's assessment of $1,100-1,140/t CFR Antwerp. Some bids from traders were heard at around $950/t CFR. Thus, buyers adhered to a wait-and-watch approach anticipating offers to decline further amidst bid-offer disparities, prevailing concerns around high power costs and logistics disruptions. With high stocks at the distributor level and service centres, buying interest has further dampened for HRCs in the EU, sources highlighted.

3. Bid-offer disparity emerges in Vietnam market: Indian mills reduced their offers for SAE1006 to $810-840/t CFR as compared with $840-850/t CFR heard towards the end of the previous week. Furthermore, Chinese offers also dropped to $775-790/t CFR compared with last week's levels of $790/t CFR. However, buyers were heard bidding at around $730/t CFR. Some lower-priced indications from Russia kept buyers hesitant in placing fresh orders.

Moreover, buyers in Vietnam are waiting for the domestic mills Formosa Ha Tinh and Hoa Phat to announce their prices for July and early-August sales.

Near-term outlook
Declining global HRC prices, volatility in ferrous futures and emerging bid-offer disparities are likely to weigh further on the Indian HRC export offers in the near term. However, with easing of Covid restrictions in China, some market sentiments may find support, highlighted traders. China's crude steel production inched up by 5.1% in April 2022 against 88.3 mnt in March 2022.