EU quota risk, high inventories drag Indian HRC

Indian hot and cold rolled coil export activity remains quiet, amid softening Chinese prices. Sources say this is due to high inventories in the European market and the perception of safeguard quota exhaustion risk impacting demand from Europe, notes Kallanish.

Indian domestic demand continues to remain stable this week. Traders anticipate demand to pick up after the upcoming general elections are completed. These are expected to be held in April or May.

A market source says: “The [European] market remains quiet, there’s not much activity. People just want to wait.” Multiple factors are contributing to the subdued market activity in Europe, including quota issues and high inventories, he adds.

Indian-origin HRC has around 310,660 tonnes of first-quarter EU safeguard quota left unused and a total of 3,719t awaiting allocation, according to EU TARIC data as of 26 February. The available quota totalled 330,000t last week. In-transit shipments are not included in the TARIC data (see Kallanish passim).

In the European market, initial Indian HRC offers were heard in the range of $690-700/tonne cfr, or $630-640/t fob India for SAE1006/S235 structural grades, for March shipment. This is a drop of $10/t on-week.

CRC offer prices were reported at $790/t cfr Europe, or $730-740/t fob India, also dropping $10/t on-week. No bids were heard. However, one market participant notes his offer price expectations are $50-60/t lower than current offers.

He adds: “I expect Indian offers [to the European market] to drop by a further $10-15/t in the coming weeks.”

In the Gulf Cooperation Council, an initial Indian offer for re-rolling grade (SAE1006) HRC was heard at $627-632/t cfr GCC, or $600-602/t fob India for March shipment.

Another India-UAE offer for pipemaking grade was heard at $630/t cfr Jebel Ali, or $600-603/t fob India for 8,000t for March shipment.

In Vietnam, initial Indian HRC offers were heard at $600-605/t cfr or $565-575/t fob India for March-shipment re-rolling SAE1006 grade HRC.

Last week, offers were heard in the range of $615-620/t cfr, or $580-590/t fob India. Traders opine softening Chinese prices and Vietnam’s own domestic market are mainly contributing to low buying interest from India.

In the domestic market, HRC offer prices remain unchanged at INR 54,000-54,500/t ($651.55-657.59/t) for E250 grade ex-Mumbai. Similarly, CRC offer prices were flat at INR 61,500-62,000/t ex-Mumbai for IS513 Grade O. Both prices saw no movement for the second consecutive week.

Suhita Poddar India