SteelMint: India HRC export index fall w-o-w amid competitive global offers

SteelMint's India HRC (SAE1006) export index fell by $9/tonne (t) w-o-w to $586/t FOB east coast India against $595/t FOB seen in the preceding week. Competitive prices from China have compelled Indian mills to lower their HRC export offers to the Middle East. In addition, limited domestic demand and low import offers in Europe (EU) have resulted in a fall in Indian hot rolled coil(HRC) offers to the EU.

Rationale: No confirmed deal (T1) was reported in this publishing window. Six indicative prices were considered as T2 inputs out of eight inputs received. The final price was an average of T1 and T2 inputs, which stood at $586/t FOB. CFR prices were converted to FOB by deducting freight costs from the buyer or seller.

Market-wise updates

1. Indian offers to UAE drop; competitive offers from China: Indian exporters have dropped offers for HRCs (HRC SAE1006) to $610-625/t CFR Middle East (ME) against $630/CFR a week ago. However, one unconfirmed deal was heard at around $615/t CFR. Indian mills have lowered offers considering competitive prices from China along with limited buying interest in the UAE market. Furthermore, Chinese offers to the UAE have dropped by $10/t w-o-w to $600-605/t CFR against 610-620/t CFR in the previous week amid volatile futures.

2. Vietnam's imported HRC market remains mute: The Vietnamese imported HRC market remained stable amid muted demand. Imported Chinese-origin HRC offers into Vietnam remained unchanged w-o-w at $570-575/t CFR while Indian mills are not offering in the Vietnamese market for a while. Demand for HRCs in Vietnam continued to remain weak. Vietnam's steel major, Formosa Ha Tinh (FHS), has announced a cut in its monthly HRC (SAE1006, skin pass) prices by $65/t for June deliveries, sources informed SteelMint. Post-revision, the effective price stands at $625-628/t CIF Ho Chi Minh while HRC (non-skin passed) prices are at $620-623/t CFR. However, Vietnamese buyers are not accepting FHS's new prices and are expecting rebates from the company.

3. Indian HRC offers to EU fall w-o-w: Indian HRC export (S275, 3mm) price indications to Europe fell by around $10/t w-o-w to $680-690/t CFR Antwerp against $690-700/t CFR a week ago. Europe's steel market is under pressure from low import offers and limited buying activity. South Korea's HRC offers are quite competitive at around $650-660/t CFR Antwerp. Moreover, there is limited domestic demand from the distribution network in the EU amid restart of mills, which were either closed for maintenance or due to technical issues. Meanwhile, northwest European mills are not offering in the spot market, as they are planning to return to the market in June for September deliveries.

Outlook
Chinese SHFE HRC October contract has also dropped by RMB 65/t ($9/t) w-o-w to RMB 3,665/t ($520/) against RMB 3,730/t ($529/t) a week ago. Market sentiments have turned negative amid declining Chinese steel futures.