India: HRC export offers remain stable amid mixed global market sentiments

BigMint’s India hot-rolled coil (HRC, S275) export index remained stable w-o-w at $555/t (FOB main port). This stability in prices can be attributed to the ongoing summer holidays as well as festive holidays in certain regions of Europe.

Meanwhile, demand in the Middle East (ME) is picking up, driven by ongoing construction and infrastructure projects. According to sources, “Demand in the ME remains stable, with end-users consistently buying and the construction sector seeing healthy project execution”. However, Indian mills held back on export offers due to better domestic prices.

1. Indian HRC export offers to EU remain range-bound: Indian HRC export offers to the EU remained rangebound for the week, with offers hovering around $605-610/t CFR Antwerp ($555-560/t FOB main port India). Trading activity in the region remained subdued amid the summer break and religious festivities observed across the continent. European HRC prices are exhibiting a mixed trend, with offers below target levels due to the holiday slowdown and regulatory uncertainty. Integrated mills are pushing for higher prices in the near term, but buyer interest is lacking, contributing to liquidity challenges in the market.

2. Chinese HRC prices to Middle East remain stable: Chinese HRC export offers to the Middle East remained stable w-o-w at $515/t CFR UAE. Notably, a tube-maker has concluded a deal of around 25,000 tonnes (t) at $512-514/t CFR UAE from China. A source said, “Demand in the ME is improving as stockists and manufacturers are restocking their supplies”.

However, Indian mills are not making export offers, preferring higher domestic prices and facing stiff competition from Chinese suppliers.

HRC futures on the Shanghai Futures Exchange (SHFE) dropped by RMB 51/t ($7/t) w-o-w to RMB 3,423/t ($477/t) as compared to RMB 3,474/t ($484/t) a week ago. Moreover, on a d-o-d basis, contracts inched down by RMB 6/t ($1/t) against RMB 3,429/t ($478/t).

Outlook

In the short term, Indian HRC export prices remain uncertain, driven by limited export offers from Indian mills and growing demand in the Middle East. European demand, currently subdued due to summer holidays and regulatory uncertainty, may see a revival as integrated mills push for higher prices in the near term, potentially stimulating buyer interest.