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SteelMint: India HRC export index falls to five-month low amidst bearish sentiments

SteelMint’s India HRC (SAE1006) export index fell by $16/tonne (t) w-o-w to $570/t FOB east coast India against $586/t FOB seen in the previous week. The index ...

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30 May 2023, 20:05 IST
SteelMint: India HRC export index falls to five-month low amidst bearish sentiments

SteelMint's India HRC (SAE1006) export index fell by $16/tonne (t) w-o-w to $570/t FOB east coast India against $586/t FOB seen in the previous week. The index has dropped to a five-month low level, as per data maintained with SteelMint. The steep drop in offers from countries like China, Vietnam, and Japan has weighed on Indian offers. Also, bid-offer disparity has kept Indian offers under check.

Rationale: One confirmed deal (T1) was reported in this publishing window. Six indicative prices were considered as T2 inputs out of twelve inputs received. The final price was an average of T1 and T2 inputs, which stood at $570/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 fall: Indian mills have lowered offers for HRCs (HRC SAE1006) to $600-610/t CFR Middle East (ME) as against $616/CFR a week ago. This came after a recent deal of around 10,000-15,000 t HRCs was heard concluded at around $605/t CFR. Market activities in the Middle East (ME) for HRCs have turned active due to lower import offers, said a source. Furthermore, Chinese offers to the UAE have dropped by $5/t w-o-w to $600/t CFR against 605/t CFR amid a sharp decline in SHFE HRC futures last week.

2. Vietnamese buyers await Hoa Phat price announcement: The Vietnamese imported HRC market witnessed subdued domestic demand. Imported Chinese-origin HRC offers into Vietnam were heard at $550-560/t CFR, down by around $20/t w-o-w against $570-575/t CFR. However, buyers are bidding for around $520-525/t CFR. Offers for the SS400 grade of HRCs stood at around $530/t CFR.

Vietnam's steel major, Formosa Ha Tinh (FHS), has further reduced monthly HRC (SAE1006, skin pass) prices by $23-40/t in addition to the $65/t cut announced earlier this month. Post-revision, prices are in the range of $580-600/t, depending on the volumes sold. Vietnamese buyers are now awaiting the price announcement of Hoa Phat which is expected in the next 2-3 days. The company may cut prices amid competitive offers, informed sources.

3. Indian HRC offers to EU fall: Indian HRC export (S275, 3mm) price indications to Europe fell by around $10/t w-o-w to $670-680/t CFR Antwerp as against $680-690/t CFR a week ago. Northwest European steelmakers have returned to the market with fresh offers. However, European buyers are holding back from booking as they are anticipating that domestic prices would drop in June. Apart from competitive import offers, Central European mills have also decreased their prices. This, in turn, has resulted in very limited buying activity in Europe.

"Indian mills have availability for June shipment. But European customers don't want high priced quick shipments so they will wait for Indian exporters to drop prices for July," commented a trader source.

Outlook

Global market sentiments have turned negative amid a sharp fall in Chinese SHFE HRC futures (October contract). Futures dropped by RMB 68/t ($10/t) w-o-w to RMB 3,597/t ($508/) against RMB 3,665/t ($518/t) a week ago.

On the other hand, Indian mills are likely to announce domestic HRC prices for June sales this week. The market expects a drop of INR 1,500/t m-o-m. However, the confirmation remains pending. Indian mills are likely to announce fresh export offers post the announcement of domestic prices.

 

30 May 2023, 20:05 IST

 

 

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