SteelMint: Limited buying interest pulls down Indian HRC export index by another $40/t w-o-w

• SteelMint's India HRC export index drops to $660/t FOB
  
  
• Limited buying interest in overseas markets
  
  

The Indian HRC export index fell further by $40/t on the overseas trade platform this week. Limited buying interest from Vietnam and the UAE continued to weigh on the offers from Indian steel mills. It should be kept in mind that Indian mills are offering boron-added HRCs for exports, as it does not fall under the purview of the export duty.

SteelMint's India HRC export index was recorded at $660/t FOB east coast, contrasted against $700/t FOB assessed a week ago, a fall of $40/t w-o-w.

Rationale: Ten 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 $660/t FOB. The CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.

Market-wise highlights

1. Indicative offers to Middle East drop by $50-70/t w-o-w: Offers from Indian mills dropped to $700-710/t CFR in the market as against last week's $760-770/t CFR UAE. "Price expectations are changing daily, several enquiries are under discussion. Yet converting them in trade deals is growing tough," informed a reliable UAE-based source.

2. Focus on domestic procurement weighs on imported HRC offers to Vietnam: The offers from domestic HRC producers Formosa Ha Tinh at $720/t CIF Ho Chi Minh City (HCMC) and that from Hoa Phat at $700/t CIF for August and early-September sales have kept buyers enticed.

• India HRC (SAE1006, boron-added): $690/t CFR. Last week's indicative offers were at $710-730/t CFR
  
  
• China HRC (SAE1006): $670-700/t CFR, depending upon mills. Last week's indications were around $705-715/t CFR.
  
  
• Russian mills' offers were heard steeply low at $640/t CFR compared with those from the Indian and Chinese counterparts. Down from the previously heard level of $680/t CFR.
  
  

Demand for imported HRCs has been relatively slow recently. Moreover, competitive offers from Russia is another factor weighing on imported HRC offers from other exporting countries.

3. Steep decline in offer indications to European market: There were few offer indications for the EU markets this week. It is getting tough for exporters to quote offers amid nil or limited bids from the buyers. A few indicative offers were heard in the range of $700-750/t CFR levels for the market from Indian mills. This stands in contrast to the week-ago levels of $780-790/t CFR. There was a rumour about one HRC parcel being booked for Italy last week at around $765/t CFR.

Outlook: Chinese domestic HRC prices have shown some improvement with a hike in SHFE futures. The most active SHFE HRC October contract settled today at RMB 4,353/t, rising by around RMB 67/t ($10) against last week's closure. However, its impact is yet to be seen in export offers as the global market is still witnessing subdued buying interest.