BigMint’s India HRC (SAE 1006) export index (for the Middle East and Vietnam) inched down to $590/tonne (t) FOB east coast India against $593/t FOB last week. Offers fell as market activity in the Middle East slowed down amid the Holy Ramadan month and competitive Chinese offers. However, Indian mills continue to quote offers at similar levels even though Chinese HRC offers dropped from last week. Moreover, global market activities also remained limited.
Indian HRC export offers declined this week even as a drop was seen in Chinese export offers last week. Indian HRC exports to the Middle East remained uncertain, as demand remained weak due to Ramadan.
Market updates:
1. Indian HRC export offers to EU drop w-o-w: Indian HRC exports prices to Europe (S275, 3mm) dropped by around $5/t w-o-w amid lower demand in the European market. Current offers are around $660-670/t CFR Antwerp ($610-620/t FOB east-coast India) against $665-675/t CFR Antwerp last week. European steel mills face falling prices due to weak demand. Buyers are holding off on purchases, hoping for prices to fall further. To stop prices from dropping further, mills may be forced to cut production. Moreover, imported HRCs were not preferred, despite being priced competitively, due to uncertainty regarding safeguard quotas.
2. ME market turns quiet amid Ramadan: Indian HRC exports to the Middle East remained range-bound for the week under review, with offers ranging at $620-625/t CFR. However, no deals were heard. China’s offers to the ME dropped by around $10/t w-o-w. Tier-1 mills are offering between $590-595/t CFR UAE. However, tier-2 mills offers’ are hovering at around $570-580/t CFR UAE. This decline is due to weakening domestic demand in the United Arab Emirates and Saudi Arabia. Customers are delaying purchases, likely in anticipation of lower prices during the upcoming Ramadan season, which traditionally leads to a slowdown in trade. The market is also waiting for new steel offers from India.
3. Vietnam imported HRC offers subdued: China’s HRC (SAE1006) offers to Vietnam fell to $560-570/t CFR for the week. In addition, Indian HRC indicative offers are stable, ranging at $605-610/t CFR HCMC, contributing to stable imported HRC prices in Vietnam.
Chinese SHFE HRC futures declined by RMB 89/t ($12/t) reaching RMB 3,785/t ($528/t) on 12 March 2024 against RMB 3,874/t ($540/t) a week ago.
Outlook
The Chinese steel industry is facing challenges with excess inventory in the factory leading to a slowdown in steel mills’ willingness to release production capacity. This, coupled with a slight decline in the supply side, indicates a complex situation for the industry. While major projects are returning to normal start-up and construction, the uneven market transactions and lower-than-expected release of demand suggest that the overall demand for steel products may not be as robust as anticipated.
Baosteel has rolled over HRC and CRC prices for April sales, after increasing in March, according to BigMint sources. Prices remain flat amid low domestic demand. However, prices of hot-dipped galvanized (DQ level) increased by RMB 100/t ($14/t).
The market is awaiting a fresh round of offers.