SteelMint: India HRC export index drops w-o-w amid limited buying interest

SteelMint's India HRC (SAE1006) export index dropped by $10/t w-o-w to $695/t FOB east coast this week as against $705/t FOB a week ago. Limited buying interest in the Middle East, competitive Chinese position cargo offers for Vietnam and the festive mode in the EU limited export deals from India.

Rationale: No confirmed deal (T1) was reported in this publishing window. Six indicative prices were considered as T2 inputs out of seven inputs received. The final price was an average of T1 and T2 inputs, which stood at $695/t FOB. CFR prices were converted to FOB by deducting freight costs from the buyer or seller.

Market-wise updates-

1. Offers for UAE fall w-o-w: Indian HRC (SAE1006) export offers for the UAE market fell by $11/t this week. Offers stood at around $730-735/t CFR. Mills have lowered offers as buyers have slowed down procurement amid festive mood, completing twenty days of the holy month of Ramadan, informed a source.

2. Lower priced Chinese position cargoes weigh on bids: Vietnamese market demand is weakening. Formosa Ha Tinh (FHS) announced its domestic HRCs (SAE1006, skin passed) prices at $732/t CIF Ho Chi Minh City (HCMC) for May and early June 2023 sales. Chinese mills offered HRC (SAE1006) around $640-650/t CFR Vietnam this week, a drop of $10-$20/t w-o-w. Some position cargoes were heard offering as low as $610/t CFR, turning market sentiments subdued. "Even though Chinese offers are competitive against domestic prices, these stand non-lucrative for buyers. Offers from Indian mills have been absent in the market for over a month," informed a source.

3. Indian HRC export prices for EU stay firm: Indian HRC export (S275) offers remained stable at $830-840/t CFR EU w-o-w amid the Easter holidays last week. The European market was closed and not much trade activities were seen last week amid a seven-day long holiday, leading up to Easter Sunday. However, the market has resumed today, informed a source. In addition, buyers are currently monitoring the impact of domestic delayed deliveries from ArcelorMittal.

Outlook: The global market sentiments have remained less supportive so far this week. Baosteel, world's top steel manufacturer, has rolled over HRC prices m-o-m for May'23 sales considering "subdued domestic demand".

Indian mills are awaiting the return of EU buyers from holidays. Also, the market is yet to ascertain the impact of coil shortages in Europe. There may be disruptions in domestic hot rolled coils production to the extent of 1 million tonnes (mnt) in the continent which may spell good news for Indian mills. Fires at ArcelorMittal's works in Gijon, Spain and Dunkirk, France have led to suspension of production from one blast furnace each at both works. These developments are expected to lead to a peak shortage in HRCs by June-August.