- Indian HRC (SAE 1006) export index remained stable this week owing to the New Year holidays
- Chinese steel futures kept dropping from last Monday and CRC/HRC is selling lower by RMB 60-100/t
- Imported HRC offers to Vietnam from China declines amid anticipation of further decline in China’s domestic prices.
SteelMint’s Indian HRC (SAE 1006) export index remained stable at $740/t FoB this week owing to the New Year holidays. Trade channels reported no firm price indications/offers/bids, hence SteelMint has rolled over its last week’s index.
The overseas buyers have adopted a wait and watch mode on a significant decline in Chinese futures. HRC futures May’21 contract in Shanghai Exchange reported a fall of RMB 188 ($29) since 25th Dec. Chinese futures kept dropping from peak last Monday and the pessimistic situation had spread to the physical sales area and CRC/HRC is selling lower by RMB 60-100/t in all sales regions. The export market is messy on rumors of low trades and most of the mills have held the offer before New Year’s day or invite bids to discuss further.
Due to this, Indian mills have also held HRC offers on dull trading. European mills are on New Year holidays and Asian buyers are holding back offers as Chinese futures have corrected sharply.
“Customers are in holiday mood and activities are likely to start from 4th Jan’21”, commented a participant from a major steel mill.
Global HRC market overview
1.Chinese HRC export offers plunge on low buying interest- Chinese HRC producers cut their export offers steeply by around $50/t this week. Low buying interest among both importers and domestic traders amid the declining futures market led to a fall in export offers. Currently, HRC export offers stand around $690-700/t FoB China in contrast with $700-720/t FoB basis in the preceding week. Also, the domestic market prices declined by around RMB 50-70/t d-o-d basis to RMB 4,550-4,580/t as of today. The domestic buyer took to a wait-and-watch approach in anticipation of further price declines which led to thinning trades in the spot market.
b) Imported HRC offers to Vietnam from China declines- The Chinese steel mills have today slashed their HRC export offers to $710-730/t CFR Vietnam, which is lower by $20 against last week’s closing. This revision in HRC offers came on the back of softened demand amid falling futures market and anticipation of further decline in China’s domestic prices.
Outlook: Chinese market is facing periodical adjustment since early last week and until now no big rebound has happened. After sharp uptick prices since the past 3 to 4 weeks, the market is under pressure and sentiments remain low. We may observe a further downfall in Chinese futures.
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