- Trading in Middle East market remains slow
- Indian offers to Europe rise by $5/t w-o-w
BigMint’s India hot-rolled coil (HRC, S275) export index rose by $5/tonne (t) w-o-w to $540/t (FOB main port). This uptick is attributed to improvement in global market sentiment and a rise in Chinese export offers. A major steel producer in the European Union (EU) has also raised its prices. Market participants in the EU are reportedly optimistic about the anticipated effects of the Carbon Border Adjustment Mechanism (CBAM).
However, the Middle East (ME) market presents a different picture. While Chinese prices have increased w-o-w, trade activity remained limited. An ME market participant noted, “Offer levels have increased, but we have not heard of any order conclusion at these levels.” Another source informed BigMint that: “Demand in the ME market is low. And, even though prices increasing, buyers are resisting these offers.”
Market updates
1. Indian HRC export offers to EU rise w-o-w: Indian HRC export offers to the EU rose by $5/t w-o-w to $590/t CFR Antwerp ($540/t FOB main port India) as compared to $585/t CFR last week. Prices rose amid a hike in domestic prices in Europe. A steel major has increased its prices. However, trade activities remained largely stable, with buyers pushing back, citing lack of real consumption. “The market is currently slow due to staggered holidays, with people expected to return by the end of August” a reliable source informed BigMint. Furthermore, market participants in the EU are increasingly counting on the anticipated impact of the Carbon Border Adjustment Mechanism (CBAM).
2. Chinese HRC offers to ME rise w-o-w: Chinese HRC export offers to the Middle East rose by around $10-15/t w-o-w, reaching $500-505/t CFR UAE. Despite slow demand in the region, offers climbed in response to rising Chinese steel prices. However, buyers remained cautious, adopting a wait-and-watch approach in anticipation of price stabilization.
Meanwhile, Indian mills refrained from offering HRCs to the Middle East, prioritizing stronger domestic demand and facing heightened competition from global suppliers.
HRC futures on the Shanghai Futures Exchange (SHFE) climbed up by RMB 74/t ($10/t) w-o-w to RMB 3,455/t ($481/t) as compared to RMB 3,381/t ($471/t) a week ago. Moreover, on a d-o-d basis, contracts rose by RMB 21/t ($4/t) against RMB 3,434/t on 28 July.
Outlook
The near-term outlook for India’s HRC export offers is expected to remain mixed. While rising Chinese prices in the global market and an increase in domestic prices within the EU show some positive trends, overall trade activity remained limited.
Both EU and ME buyers are currently in a “wait and watch” mode. Similarly, market participants in India are awaiting price revisions from the mills before making significant moves.
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