- Safeguard quota risks keep EU buyers
- Ample supply caps potential price gains
BigMint’s India hot-rolled coil (HRC, S275 for Europe) export index remained stable w-o-w at $555/tonne (t) (FOB main port) amid cautious market sentiments. “There is no change in offers, but European buyers are not actively trading due to the risk associated with the safeguard quota,” a market participant noted.
Meanwhile, India’s HRC (SAE1006 for the Middle East) export index also remained stable w-o-w at $510/t FOB main port. Competitive offers from China persisted in the region.
1. Indian HRC export offers to EU hold firm: Indian HRC export offers to the EU remained range-bound at $600-605/t CFR Antwerp ($550-555/t FOB India). A deal for around 10,000 t of HRCs was booked at similar prices for September shipment. However, the safeguard quota risk persisted, due to which buyers were cautious.
Moreover, demand remained subdued, and buyers viewed recent gains as driven by sentiment, not real consumption. While Indian mills cited future import curbs and higher costs under CBAM to justify increases, buyers argued that supply was sufficient and end-user demand weak, casting doubt on further price hikes.
2. Chinese HRC prices to Middle East drop: Chinese HRC export offers to the Middle East dropped by $5/t w-o-w to $510/t CFR UAE against $515/t CFR UAE. Middle East-based buyers also remained cautious owing to the upcoming global holidays. “There have been no new inquiries, with muted sentiment among re-rollers. The market expects China to begin negotiations after the Victory Day Parade holiday,” a participant noted.
Moreover, Indian HRC export offers to the ME remained stable at around $530-535/t CFR UAE. However, trade activities remained muted.
3. Chinese HRC offers to Vietnam remain range-bound w-o-w: Chinese HRC export offers to Vietnam stayed unchanged at $500-505/t CFR, as weak demand kept the market quiet.
HRC futures on the Shanghai Futures Exchange (SHFE) dropped by RMB 68/t ($10/t) w-o-w to RMB 3,302/t ($462/t) as compared to RMB 3,370/t ($472/t) a week ago.
Outlook
The near-term outlook for Indian hot-rolled coil (HRC) export offers is expected to remain mixed. The risk of a tightening safeguard quota remains a concern.
Meanwhile, competitive offers from China in the Middle East are also keeping mills under pressure. Indian market participants are currently waiting for the announcement of domestic prices.
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