SteelMint: India HRC export index weighed down by lower Chinese offers, weak sentiments

• SteelMint’s India HRC export index drops further by $20/t w-o-w
• Buyers in UAE lower bids to $920-930/t CFR basis
• European market demand yet to show improvement post-Easter holidays

SteelMint’s India HRC export index dropped to $920/t FOB east contrasted against the previous week’s $940/t FOB level. Moreover, HRC export offers are on a decline on the global platform, as falling Chinese steel futures weigh on the demand outlook. For instance, Chinese hot rolled coils (HRC) (SS400) have dropped $50/t w-o-w to $850/t FOB basis.

“Indian mills are exploring export opportunities, but there are no firm bids at the moment. Prices are likely to see a correction amidst lower Chinese offers, given the surge in Covid cases,” informed a trader.

Market-wise highlights

1. Vietnamese end-users stick to domestic procurements: Buyers continue to stick to domestic procurement despite Chinese HRC offers remaining competitive for the second consecutive week. Concerns over marine freight rates, longer delivery lead times and issues around vessels availability have been the prime reasons weighing on the demand for imported HRCs in Vietnam. Chinese offers for HRC (SAE1006) stand at around $850-860/t CFR and that of SS400 grade HRC around $820/t CFR Vietnam. This has contrasted against Formosa’s $950-955/t CIF HCMC and Hoa Phats $924/t CFR HCMC for June shipments. Indian mills remain out of the Vietnamese market because of lower net sales realisations (NSR).

2. Cheaper domestic offers, reduced working hours weigh on HRC offers to UAE: The imported HRC offers have been weighed down owing to the limited working hours in the Middle East markets, especially UAE where cheaper alternatives are available domestically. Moreover, Chinese mills have further reduced offers to $930-940/t CFR UAE, whereas buyers further lowered their bids to $920-930/t CFR in anticipation of a decline in offers in the near term. Indian HRC offers have also dropped to $950-980/t CFR which was around $980-1,000/t CFR a week ago.

3. No demand improvement in EU post-Easter holidays: The HRC (S275) export offers to Europe have remained range-bound at $1,130-1,140/t CFR against the previous week’s assessment of $1,130-1,150/t CFR. Market conditions remain similar to that in the previous week with buyers facing issues around opening of LCs.