SteelMint: Indian HRC export index drops $17/t, w-o-w, on slow overseas demand

• SteelMint’s India HRC export index drops to $583/t FOB
  
  
• Buying subsides in overseas markets
  
  

SteelMint’s India HRC (SAE1006, boron-added) export index was recorded at $583/t FOB east coast as against $600/t FOB assessed a week ago, a decrease of $17/t w-o-w. Buying interest in key markets continues to remain lacklustre, which is also keeping export offers under pressure.

Rationale: Eighteen indicative prices were considered as T2 inputs, while there was no export deal reported to Vietnam or the UAE to be considered as T1. The final price was an average of T1 and T2 inputs which stood at $583/t FOB. The CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.

Market-wise highlights

1. Limited buying interest in Middle East: There has been very limited buying interest seen from the region lately. Continual decline in HRC offers on the global trade platform and volatility in the ferrous futures market has continued to weigh on buying interest.

Indications from India were heard at around $685-695/t CFR Vietnam levels, largely unchanged against the previous week. However, there have been no firm bids from the region. "The market is very silent and there are no firm bids at present," said a UAE-based source.

Also, Chinese HRC offer indications were around $670/t CFR compared with $680-690/t CFR a week back.

2. Vietnam market glued to domestic procurement: The domestic steel majors announced their prices for September and early-October sales last week. Where Formosa is offering skinpassed HRC (SAE1006) at $655/t CIF HCMC, Hoa Phat is offering non-skinpassed HRC at $615/t CIF.

Meanwhile, unwilling to negotiate the hassles of overseas trades, buyers continue to purchase domestic material.

Also, demand is slow in the country which continues to exert pressure on domestic prices as well as offers from major exporting countries. Indian HRC indications were heard at around $590-600/t CFR, while those from China were at $570-590/t CFR, both down on w-o-w basis.

3. European demand subdued: Market participants are gradually deserting the market ahead of holidays. Thus, there are no firm bids or offers for the region. A few indications were heard at $700/t CFR for Indian-origin HRC. In August the market remains muted as a majority of the participants go on holidays. 

Outlook
Rising competition with China in the markets of the Middle East and Vietnam are going to keep the Indian HRC offers under pressure. Moreover, slow demand in these regions along with temporary withdrawal of European buyers amid holidays in August are likely to weigh on export volumes in the near term.