India: HRC export offers rise by $10/t w-o-w amid hike in offers by global competitors

• HRC export offers to EU rise $10/t w-o-w
• Chinese offers to the Middle East edge up

BigMint’s India hot-rolled coil (HRC, S275) export index rose by $10/tonne (t) w-o-w to $550/t (FOB main port). The increase in offers was driven by increased offers from global competitors. Despite the increase in prices the domestic demand in the EU remained moderate amid the ongoing summer break in the region.

Buyers in the Middle East remained cautious owing to a volatile global market as subdued seasonal activity and minimal demand from the construction sector kept trade activities limited in the region.

Rationale

No confirmed deal (T1) was reported in this publishing window. Six indicative prices were considered as T2 inputs out of eight inputs received. The final price was an average of T1 and T2 inputs, which stood at $550/t FOB. CFR prices were converted to FOB by deducting freight costs from the buyer or seller.

1.Indian HRC export offers to EU rise w-o-w: Indian HRC export offers to the EU increased by $10/t w-o-w to $600/t CFR Antwerp ($550/t FOB main port India) as compared to $590/t CFR a week ago. “Prices have increased, however trade activities remain low”, said a source. Another source said, “The EU’s holiday season has slowed market activity, leading to weak demand as buyers remain inactive and trade volumes drop significantly during this period”. European mills have raised their HRC prices, which has led to a corresponding increase in import prices.

2.Chinese HRC offers to ME rise w-o-w: Chinese HRC export offers to the Middle East moved up by approximately $10/t w-o-w, reaching $510/t CFR UAE against $500-505/t CFR last week. Chinese steel prices are on the rise, but regional demand remains sluggish. As a result, buyers are holding off on purchases, hoping for prices to stabilize.

Indian mills, meanwhile, focused on the domestic market, refraining from offering hot-rolled coils (HRCs) to the Middle East. They prioritized the stronger demand at home and faced intense competition from other global suppliers.

3.China’s HRC offers to Vietnam drop w-o-w: Chinese HRC export offers to Vietnam dropped by $5-10/t w-o-w to $485-490/t, following the decline in China’s SHFE HRC futures.

HRC futures on the Shanghai Futures Exchange (SHFE) dropped by RMB 62/t ($9/t) w-o-w to RMB 3,393/t ($472/t) as compared to RMB 3,455/t ($481/t) a week ago. However, d-o-d, contracts stayed stable.

Hoa Phat Group, Vietnamese steel major, has increased its monthly HRC (SAE1006, non-skin-passed) prices by approximately $16/t m-o-m for September sales. Post-revision, prices in the southern region were at around $518/t or VND 13,580,000/t as compared to $502/t a month ago, excluding VAT.

Outlook

The short-term outlook for Indian HRC exports remains cautiously optimistic with slight price support driven by increased prices in domestic market as well as by global competitors. However, European buyers are on summer vacation, and other global market participants are holding off on purchases until the holidays end. As a result, buyers are taking a “wait and see” approach, and significant restocking is not expected until after the summer season.