SteelMint: Slow overseas demand pulls down Indian HRC export index by $18/t, w-o-w

• SteelMint's India HRC export index drops to $565/t FOB
  
  
• Buying interest remains low in overseas markets
  
  

SteelMint's India HRC (SAE1006, boron-added) export index was recorded at $565/t FOB east coast as against $583/t FOB assessed a week ago, a decrease of $18/t w-o-w. Slow overseas demand continued to weigh on the offers from Indian mills.

Rationale: Eleven 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 $565/t FOB. The CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.

Market-wise highlights-

1. Limited buying interest from Middle East: Demand in the Middle East region continues to remain slow, especially in the UAE. Thus, Indian mills have reduced offers to around $620-630/t CFR levels. The buying interest is quite low in the market factoring the boron added HRCs being offered by Indian mills, sources informed SteelMint.

However a deal involving 25,000 t of Indian HRC (boron added) was heard concluded last week at $630/t CFR levels for August or early-September. However, this could not be confimed till the time of publishing the article.

Also, Chinese HRC offer indications were around $660/t CFR compared with $670/t CFR a week back.

2. Low buying interest in Vietnam: The imported HRC prices in Vietnam continue to remain under pressure on low buying interest. Indian mills were heard offering at around $590-600/t CFR, unchanged w-o-w. However, a few offers were also heard higher at $610/t CFR. Meanwhile, offers from Chinese mills also remain at $570-590/t CFR for HRC (SAE1006).

However, supply side constraints are likely to emerge in near term because of the production cuts in China and mills curtailing production in India amid slow domestic and overseas demand. Thus, participants opine that the prices may rise for Chinese cargoes as well, while offers are already being heard on higher side from Indian mills.

3. European demand subdued: Offers for the European market dropped to $690-700/t CFR from the last week levels of $700/t CFR. The demand is cooling down as EU-based buyers are gradually deserting the market, SteelMint learnt from reliable sources. Also, there are no firm bids or offers for the region. In August, the market will remain muted as a majority of the participants go on holidays.

4. Offers stay firm for Nepal: Indian mills have been offering HRC to Nepal at $52,500/t (equivalent to $669/t) CFR Raxaul Border for the second week in a row. Also, a deal for 7,000 t of HRCs was booked at INR 52,500-52,800/t in the previous week for delivery in August or early-September. However, this could not be confirmed until the time of publishing the article.