SteelMint: Indian mills hold HRC export offers over lacklustre demand

SteelMint's India HRC (SAE1006, boron-added) export index remained rangebound at $573/t FOB east coast India for the second consecutive week. There were no firm offers from Indian mills for the past couple of weeks. Buying interest in the overseas markets was also lacklustre.

"Indian mills have not been quoting since the past couple of weeks amid holidays and shall now roll out offers for December and early-January sales," sources informed. HRC offers are declining globally keeping buyers on the sidelines, they added.

Rationale: Seven indicative prices were considered as T2 inputs, while there were no deals reported under T1. The final price was an average of T1 and T2 inputs which stood at $573/t FOB. CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.

Market highlights:

• Competition emerges in Vietnamese market: For Chinese origin HRC (SAE1006), mills were heard quoting at $555-560/t CFR Vietnam almost at similar levels to those of the previous week. Offers for Chinese SS400 grade HRC were heard on the lower side of $520/t CFR. Last week, indications from Japanese HRC too were around $560/t CFR.
  
  

These price levels are too low to attract Indian mills. Moreover, they are enjoying better domestic realisations and their price idea is around $600-610/t CFR Vietnam.

Meanwhile, Vietnamese buyers are expecting prices to drop further. Therefore, they are waiting before making fresh purchases.

• Subdued demand in UAE: Low buying interest in the UAE weighed on offers from Chinese mills, which declined by about $40-50/t this week. Indications for Chinese HRC were heard at $570/t CFR. However, Indian mills have no firm offers in the market with last indications at around $620-630/t CFR.
  
  

"Weakening global HRC prices and the appreciation of the dollar are among the prime demand dampeners," informed sources. Moreover, no bids were received from buyers, they added.

• Buying interest low in Europe: Buying interest is missing in the European market amid various issues including the appreciation of the dollar. "Boron addition, slow consumption of previously piled up inventories amid low downstream industrial processing activities (both value addition and product manufacturing), high energy costs and recessionary concerns are weighing on demand for imported HRC," highlighted a source. Last indications from Indian mills were heard at around $640/t CFR Antwerp, but thes offers failed to attract buyers who were expecting prices to drop further.
  
  

Near-term outlook:
Indian steel majors are likely to come up with fresh offers for once the domestic price announcements are made for November sales. In view of the low buying interest and declining global HRC prices, it is anticipated that export offers are likely to remain under pressure in the near term.