SteelMint: Indian HRC export index drops by $40/t on bid offer disparities

• SteelMint's India HRC export index drops to $600/t FOB
  
  
• Bid-offer disparity in Middle East weighs on buying interest
  
  
• Vietnam buyers await price announcement from Hoa Phat
  
  

SteelMint's India HRC (SAE1006, boron-added) export index was recorded at $600/t FOB east coast, as against $640/t FOB assessed a week ago, a fall of $40/t w-o-w. Demand has remained depressed in the key export markets for India. Also bid-offer disparty and preference for domestically produced products is weighing on offers from India.

Rationale: Seventeen indicative prices were considered as T2 inputs, while there was no export deal reported to Vietnam or the UAE to be considered as T1. The final price was an average of T1 and T2 inputs which stood at $600/t FOB. The CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.

Market-wise highlights

1. Middle East market opens with widening in bids and offers: The difference between bids and offers widened as the market resumed from holidays. Last week, the Middle-East market was inactive amidst Eid and Haj pilgrimage. The offers from Indian mills were heard at around $680-690/t CFR, down from the previously heard levels of $700-710/t CFR pre-holidays. However, bids from the UAE buyers were heard at around $630-650/t CFR.

Also, Chinese HRC offer indications were at around $680-690/t CFR levels this week.

2. Vietnamese market awaits announcement from Hoa Phat: Buyers in Vietnam continue to stick to procuring domestically. Buyers are now looking forward to price announcement from Hoa Phat after Formosa reduced prices for September and early-Octorber sales last week. The limited buying interest in imported HRCs and forced exporters to scout the market with reduced offers.

Offers from India have dropped to $610/t CFR contrasted against $660/t CFR heard last week. Similarly, indications from Chinese mills dropped to $600-610/t from the previous week's ideas of $640/t CFR. Moreover, demand will be impacted by the seasonal monsoon showers in the Southeast Asian countries. CIS-origin offers were heard on the lower side of $600/t CFR Vietnam.

3. European demand remains subdued: Varied issues like limited interest in booking boron-added HRCs, LC opening issues since March 2022 and high energy costs have kept weighing on demand for Indian products. Also, absence of bids from the EU buyers is posing a major a challenge for both mills and traders in India. Offer indications from India were heard at $720-725/t CFR, unchanged from the previous week.

Outlook
India HRC export prices are likely to be weighed down by slow overseas demand. Moreover, increased competition from China and monsoons in the South East Asian region will continue posing further challenges in the near term.