Indian steel mills are prioritising the domestic market for hot-rolled coils (HRC), putting export offers to Southeast Asia and the Middle East (ME) on hold for another week. This decision is driven by higher domestic realisations and limited export allocations. Moreover, Chinese prices remain competitive, few deals were heard concluded from China to ME. Meanwhile, market sentiments in Europe was slow with competitive Vietnamese offers in the region. “India is fully quiet on exports,” said a reliable BigMint source.
Market updates:
1. Chinese HRC export offers to ME increase: China’s HRC (grades S235 and S275) export offers to ME rose by $5-10/t w-o-w for the week. The current offers are ranging at $580-585/t CFR UAE, as compared to $575-580/t CFR UAE, last week. This rise is attributed to improving market sentiments. Moreover, a deal of approximately of 15,000 tonnes (t) was heard concluded at similar price levels. Japan’s HRC export offers to ME are also at similar range of $580-590/t CFR UAE. In addition, a deal of around 10,000 t was heard concluded at similar price levels for June shipments. However, Indian mills, have continued to hold HRC export offers due to limited availability for export and higher prices achievable domestically.
2. Vietnam’s import offers range-bound w-o-w: Imported offers of China-origin HRC (SAE1006) into Vietnam remained range-bound w-o-w at $555-565/t CFR Vietnam. Market demand in the region is still slow, buyers are cautious towards import offers despite hike in domestic prices. Formosa Ha Tinh has increased HRC prices by $15/t m-o-m to $600-610/t CIF HCMC for July 2024 shipments. Meanwhile, Hoa Phat has increased its monthly HRC prices by $27/t to $580/t CIF HCMC for July, 2024 sales.
3. Indian mills continue to hold HRC offers to EU: Indian steel mills continued to hold their HRC export offers (S275, 3mm) to Europe this week as well. As for the European Union (EU’s) domestic market, HRC prices are stable despite muted trading activity due to low demand and distributors avoiding inventory buildup. Mills are unlikely to lower prices as they believe it won’t drive sales up. HRC imports also faced low demand in EU due to longer delivery times, higher prices and uncertainty about changes in the safeguard measures.
Outlook
The near-term outlook for Indian HRC exports remained mixed. Strong domestic demand and limited export allocations are likely to continue hindering export volumes in the coming weeks. A potential shift could occur if production recovers, but this would depend on Indian mills becoming more price competitive in the global market.