- Indian HRC export offers to the EU and ME fall
- Vietnam’s Formosa Ha Tinh cuts HRC prices by $45/t m-o-m
BigMint’s India HRC (SAE 1006) export index (for the Middle East and Vietnam) inched down w-o-w to $596/tonne (t) FOB against $597/t FOB east coast India. Export offers to the Middle East were on the lower side w-o-w at $625-630/t CFR. Moreover, offers to Europe dropped $10-15/t w-o-w as buyers hesitated to restock amid Q1 quotas for Indian HRC getting exhausted. In addition, China’s Shanghai Futures Exchange experienced a significant decline in prices post Lunar New Year holidays.
Rationale: No confirmed deal (T1) was reported in this publishing window. Ten indicative prices were considered as T2 inputs out of 11 inputs received. The final price was an average of T1 and T2 inputs, which stood at $596/t FOB. CFR prices were converted to FOB by deducting freight costs from the buyer or seller.
Market updates:
1. Indian export offers to EU down w-o-w: Indian HRC exports to Europe (S275, 3mm) declined by around $10-15/t w-o-w. Current offers are around $685-690/t CFR Antwerp ($635-640/t FOB east-coast India) against $700-705/t CFR Antwerp last week. Offers dropped w-o-w due to weak buyer demand. Both high existing inventories and limited end-user demand led buyers to avoid restocking, prompting Indian steelmakers to offer lower export prices for HRC.
2. Exports to ME fall: Indian HRC export offers to the Middle East inched down w-o-w to $625-630/t CFR against $630-635/t CFR amid lower import offers from China. Chinese HRC prices edged down to $595-600/t CFR UAE against $600-610/t CFR UAE a week ago. China’s SHFE HRC futures declined by RMB 15/t ($2/t) w-o-w to RMB 3901/t ($542/t) against RMB 3916/t ($544/t). However, it rose by RMB 19/t ($3/t) d-o-d against RMB 3,882/t ($539/t) a day ago.
3. HRC prices fall in Vietnam: Vietnamese steel major Formosa Ha Tinh has reduced HRC prices by $45/t for April shipments, ranging at $613-620/t CIF Ho Chi Minh City. This follows a decrease in import offers from China reporting a decline in HRC of grade SAE1006 m-o-m to $600/t CFR in February amidst weaker global market sentiment. Moreover, domestic competitor Hoa Phat also lowered its HRC prices for April-May, further pressuring the market. Furthermore, Chinese HRC futures (May 2023 contracts) fell after the CNY holidays following domestic HRC price drop.
Outlook:
Chinese SHFE HRC futures ticked up d-o-d today supporting global market sentiments. However, longer delivery times, geopolitical issues, and concerns about Indian HRC import quotas to the EU running out early in Q2 are likely to weigh on Indian HRC export prices.
Source: BigMint
