Slow buying, increased competition weigh on SteelMint India HRC export index

• SteelMint’s India HRC export index drops steeply by $70/t w-o-w
• Buyers in UAE lower bids below $950/t CFR basis
• European market remains mute for most of the previous week over Easter holidays

SteelMint’s India HRC export index dropped to $940/t FOB east contrasted against the previous week’s $1,010/t FOB level.

Market-wise highlights:

1. Vietnamese end-users stick to domestic procurement: Domestic steel majors in Vietnam announced their price levels for June and early July sales in the past few days. Subsequent to the announcement, Formosa’s HRC (SAE10006, skinpasses) is being offered at $950-955/t CIF Ho Chi Minh City (HCMC) while Hoa Phat’s offer stands at around $924/t CIF HCMC. Moreover, the Vietnamese buyers have been preferring domestically produced HRCs over imported ones since the beginning of the year as domestic supplies improved while the Russia-Ukraine geo-political tensions led to disruptions in marine logistics towards mid-February. Moreover, Indian manufacturers have remained focused on the UAE and European markets which are fetching higher realisations.

2. Cheaper domestic HRC keeps UAE buyers enticed: Availability of cheaper alternatives domestically has led to a shift in the buyer’s focus in the UAE, SteelMint learnt from reliable market sources. This has weighed on imported HRC (SAE1006) prices as the same have dropped to $980-1,000/t CFR from India (down by $10-20/t), whereas those from China are ranging between $950-970/t CFR from the previous week’s $980/t CFR mark. Also, bids were heard to have dipped below $950/t CFR levels.

An Indian mill had booked 5,000-10,000 t HRC (SAE1006) at $1,000/t CFR for end-May or early June shipment at the beginning of the previous week.

3. Easter holidays keep European market silent last week: The HRC (S275) export offers to Europe dropped by $50/t to $1,130-1,150/t CFR Antwerp (Europe) this week. Easter holidays and slowed demand in the European market amid issues with the opening of Line of Credits with banks continued to weigh on the offers from India.

Trade sources highlighted weaker buying interest at ongoing offers. Hence, a correction is likey in the near short term.