- EU buyers prefer domestic material for faster delivery
- Chinese offers to Middle East mixed in slow market
Indian hot rolled coil (HRC) (S275) export offers to the European Union (EU) dropped by $10/tonne (t) w-o-w. However, trade activities in the region remained subdued.
Chinese HRC offers to the Middle East (ME) remained range-bound amid summer slowdown while Japan booked HRCs to ME for end-July shipment. Indian mills are not actively offering to the ME amid competitive Chinese prices and higher domestic realisation.
1. EU buyers prefer domestic material: Indian HRC export offers to the EU dropped by $10/t w-o-w to $630-635/t CFR Antwerp ($580-585/t FOB eastern Indian port) against $640-645/t CFR last week. Moreover, trade activity is likely to stay subdued in the near term, as European buyers continue to prefer domestic HRC supplies due to faster delivery timelines and anticipated post-summer restocking needs. Additionally, Indian steel producers are said to be prioritising the domestic market, where they are securing better price realisations. “Indian HRC offers to the EU are considerably higher compared to those from other Southeast Asian mills,” informed a reliable source.
2. Chinese HRC offers to ME show mix trends: Chinese HRC (S235 and S275) export offers to the ME remained range-bound at $480-485/t CFR UAE. Furthermore, the Middle Eastern market sentiment remains slow, largely due to the ongoing summer season and weak demand from the housing sector. A BigMint source noted that the “summer season has led to reduced construction activity,” further impacting HRC demand.
However, a significant deal for 40,000-45,000 t of Japanese HRCs was reportedly concluded for the ME at $500-505/t CFR for end-July shipment.
Meanwhile, Indian mills have continued to withhold their HRC offers to the Middle East due to competitive offers and better domestic realisation for their products
3. Vietnam’s domestic market weak: The Vietnamese domestic market remained weak and buying interest was limited, with prices under pressure. Moreover, market participants are cautious about buying and adopting a wait-and-see approach.
Chinese HRC offers to Vietnam remained range-bound. However, China’s HRC futures on the Shanghai Futures Exchange (SHFE) inched down by RMB 20/t ($3/t) w-o-w to RMB 3,206/t ($444/t) as compared to RMB 3,226/t ($447/t) a week ago.
Outlook
Global HRC market is expected to remain under pressure in the near term due to cautious buyer sentiment and seasonal slowdowns. Moreover, competitive domestic offers and better realisations in local markets are likely to keep export activity limited.
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