- Indian mills continue to keep HRC export offers on hold
- Global prices witness uptick tracking Chinese futures rebound
Indian mills have continued to put hot rolled coil (HRC) export offers on hold for Southeast Asia and the Middle East (ME) for yet another week. This is due to planned maintenance shutdowns and a rise in domestic HRC prices. Mills are currently prioritising the domestic market and have limited export allocations for HRC.
Meanwhile, Chinese HRC prices are rising on the back of a positive trend in the Shanghai Futures Exchange (SHFE). However, Chinese prices remain competitive compared to Indian offers, further discouraging Indian mills from exporting. Additionally, the European Union (EU) market is currently quiet, and geopolitical tensions combined with bad weather conditions in the ME are making those regions less attractive for Indian exports. With competitive offers from China and Japan, Indian mills are choosing to focus on the domestic market for now.
Market updates
1. Chinese HRC offers for ME inch up w-o-w: Chinese HRC (SAE1006) export offers to the ME were assessed at $560-570/t CFR UAE. Moreover, offers for Japan-origin HRCs were at $570-575/t CFR UAE. A deal was heard concluded of around 45,000 t of HRC from Japan at similar levels for June shipments, informed reliable sources. However, Indian mills remain on the sidelines due to maintenance shutdown and higher domestic prices. Last heard indicative prices were around $595/t CFR UAE. Heavy rain in the UAE has weakened domestic demand there, but the market is expected to rebound as weather improves.
2. Vietnam’s import offers edge up: Imported offers for China-origin hot-rolled coils (HRC SAE1006) into Vietnam rose by $5 to $550-560/t CFR Vietnam amid limited trade activities and competitive domestic prices. A rapid rise in Chinese SHFE HRC prices triggered caution among Vietnamese steel importers, leading to a slowdown in the Vietnamese import market. Moreover, Vietnamese steel major Formosa Ha Tinh has reduced HRC prices by $10/t m-o-m for June-July’24 shipments. However, the company has maintained its Vietnamese dollar (VND) denominated list prices for the same. Subsequent to the revision, prices of HRC (SAE1006, skin pass) stand at around $585-595/t CIF Ho Chi Minh City (HCMC).
3. Mills hold HRC offers to EU: Indian mills continue to hold HRC export (S275, 3mm) offers to Europe. However, price indications are around $625-635/t CFR Antwerp, down by $5 w-o-w. In addition, end-user consumption in EU is slow, and distributors are hesitant to make large purchases. This cautiousness extends to spot buyers who are avoiding building up stockpiles. Instead, they are opting for smaller, more frequent purchases to meet immediate needs and minimise the risk of prices falling in the near future.
Outlook
The near-term outlook for Indian HRC exports remains mixed. A return to growth will depend on improved global market conditions, a pick-up in demand, particularly in the EU, and swift completion of maintenance activities at Indian mills. On the other hand, domestic HRC trade prices have seen an increase. BigMint’s benchmark assessment (bi-weekly) for HRC (IS2062, Gr E250, 2.5-8mm) increased INR 500-900/t ($6-11/t) w-o-w to INR 53,400/t ($641/t) on 23 April.
A few market sources indicated that Indian mills are expected to return to the market soon for end-June or July shipments.
Source: Bigmint
