[SMM Global HRC Weekly Review] India Leads Hikes as EU Import Premium Widens; China Stock Build-Up Dampens Asia

During the week of October 2 to October 9, global hot-rolled coil (HRC) import and export offers sustained a "strong West, stable East" trajectory. According to SMM research, in Europe, Turkish country-specific quotas were exhausted, and rising expectations of anti-dumping provisional duties prompted European buyers to withdraw customs clearance applications en masse, making quota-cleared material increasingly scarce. India capitalized on this to raise prices again, with Indian HRC quotes to Northern Europe jumping 30 USD/tonne WoW on a CFR basis. However, India's Q4 EU quota was also fully exhausted on October 8, leaving this round of price premiums without quota support. In Asia, following the conclusion of China's Golden Week holiday, domestic social inventories accumulated significantly, and a second round of coke price cuts was underway, preventing export quotes from rising upon market resumption. Meanwhile, Vietnamese mills raised list prices and Indonesian buyers returned to the market, pushing Southeast Asian quotes slightly higher. Black Sea FOB quotes remained steady, though shipping security conditions deteriorated further.

Export Market Review: India Hikes Prices; China, Türkiye, and Black Sea Hold Flat

China (Post-Holiday Accumulation; Quotes Hold Flat): Tianjin Port HRC FOB quotes remained flat compared to pre-holiday levels. According to SMM research, post-holiday export transactions were concentrated at 491–495 USD/tonne FOB, slightly below pre-holiday levels. Small and medium-sized mills in Northern China lowered Q235 quotes to 490–495 USD/tonne FOB, while major mills maintained SS400 quotes at 505–515 USD/tonne FOB. The market resumption failed to trigger price increases due to headwinds in both domestic demand and raw material costs: SMM data showed HRC social inventories across 86 surveyed warehouses increased by 308,200 tonnes WoW to 4.915 million tonnes, up 19.98% YoY, while the front-month futures contract dropped 1.22% on the first trading day. With a second round of coke price reductions brewing, cost support weakened. However, as steel mills remained in loss-making territory, downside room was equally limited, keeping export quotes sideways near pre-holiday levels.
India (European Premium & Tight Supply Move Quotes Upward): Indian HRC export quotes rose 10 USD/tonne WoW to 670 USD/tonne FOB. According to SMM research, the price hike was supported by three factors:

EU Quota Scarcity: After Turkish quotas were exhausted, India became one of the few remaining major origins capable of clearing within quotas. Mills raised offers to Northern Europe to 750–760 USD/tonne CFR, with some sellers targeting 760–770 USD/tonne CFR. However, India's remaining HRC quota dropped from ~46,000 tonnes on October 5 to ~19,000 tonnes on October 7, and was completely exhausted on October 8. Cargoes arriving thereafter face a 50% out-of-quota tariff or must defer clearance to Q1.
Firm Domestic Demand: From April to September, finished steel consumption in India grew by 7.5% YoY, outpacing production growth of 3.7%. Domestic HRC prices rose by ~8 USD/tonne during the week, reducing mills' willingness to grant export discounts.
Tightening Supply: Tata Steel initiated a ~3-week maintenance shutdown at its Meramandali plant, leaving distributors with only ~15% of their normal allocation. However, these high export quotes have yet to be confirmed by transactions: European buyers countered at ~700 USD/tonne CFR; Indian mills issued no firm offers to Vietnam, with indicative quotes at ~575 USD/tonne CFR; Middle East offers held firm at 620–630 USD/tonne CFR.

Türkiye (Quotas Exhausted, Clearances Withdrawn, Quotes Hold Flat): Turkish HRC export quotes remained flat at 610 USD/tonne FOB. According to SMM research, the stabilization of prices does not indicate a demand recovery. Türkiye's country-specific quota has been exhausted, disqualifying it from accessing remaining FTA quotas. Provisional anti-dumping duty rates are still being calculated (expected around 15%), leading European buyers to withdraw customs clearance applications in large volumes and store cargoes in bonded warehouses pending the next quota reset. Domestic Turkish HRC prices held flat but trading was frozen, while import quotes stood firm at 555 USD/tonne CFR. Mills lacked domestic diversion channels and could not secure new orders from Europe, leaving them with no choice but to hold quotes firm and wait for Q1 shipment inquiries.
Black Sea (Escalating Maritime Risks; Nominal Quotes Without Volume): Black Sea HRC export quotes remained steady at 520 USD/tonne FOB. According to SMM research, a Turkish-owned vessel caught fire and sank in Romania's EEZ on October 5, and two more bulk carriers were attacked in Bulgaria's EEZ on October 6, pushing maritime risk premiums higher with zero public trades reported for the week. On the Russian side, railway capacity prioritised grain exports, constraining port arrivals in the Baltic. Freight from Baltic ports to Türkiye hovered around 55–60 USD/tonne, rendering rerouted landed costs far higher than nominal FOB quotes.
Indonesia (Buying Interest Returns, Quotes Inch Up): Indonesian HRC export quotes rose 5 USD/tonne WoW to 525 USD/tonne FOB. According to SMM research, Indonesian mills kept quotes firm prior to the holiday while awaiting China's market resumption. As the working week resumed, buying interest returned, prompting mills to raise offers. Vietnamese mills had previously raised list prices by ~8–12 USD/tonne, easing competitive pressure on Indonesian material, with offers to Vietnam rising from 538 USD/tonne to 542 USD/tonne CFR. On raw materials, rising regional slab prices triggered cost concerns, leading some mills to adjust HRC quotes higher, though Indonesian slab export quotes held flat at 490 USD/tonne FOB as cost pressures had not fully transmitted.

Import Market Review: European Import Premium Widens, Southeast Asian List Prices Rise

Europe (Dual Quota & Tariff Constraints; Import Premium Widens Further): Indian HRC CFR quotes to Northern Europe jumped 30 USD/tonne WoW to 760 USD/tonne CFR, while Italian CIF import quotes rose 5 USD/tonne to 710 USD/tonne CIF. According to SMM research, import price increases were driven by the scarcity of quota-eligible material rather than demand recovery. Turkish origin material withdrew from clearance on a large scale due to quota exhaustion and anti-dumping concerns; India's remaining quota dropped from ~46,000 tonnes on October 5 to ~19,000 tonnes on October 7 and was exhausted on October 8. As clearable volumes dwindled, Indian offers drifted higher, slightly above Turkish levels, though high-level trades remain unconfirmed. Offers from Vietnam, Taiwan (China), and South Korea in Antwerp hovered around 760–780 EUR/tonne DDP (~850–873 USD/tonne DDP), exceeding European domestic EXW prices and eroding import price advantages. Buyers shifted toward forward resources for Q2 clearance while favoring prompt spot stocks and already-arrived cargoes for near-term needs. On costs, the European Commission published the Q3 CBAM certificate price on October 5 at 82.32 EUR/tonne CO2. According to SMM Steel CBAM Calculator estimates, carbon costs per tonne of HRC stand at ~278 EUR for India, ~179 EUR for China, and ~80 EUR for Japan. While India holds an advantage in quotas, its carbon cost is the highest; how carbon costs are allocated in contracts will shape European buyers' next purchasing decisions.
Southeast Asia (Vietnam Raises List Prices; Indian Price Gap Widens): Indian HRC CFR quotes to Vietnam rose 7 USD/tonne WoW to 575 USD/tonne CFR. According to SMM research, this increase was a passive transmission of higher Indian FOB prices following European market strength: Indian mills issued no firm offers to Vietnam, and Vietnamese buyers largely ignored Indian material. Mainstream ASEAN prices edged higher in tandem. A major Vietnamese mill raised HRC list prices for December and January delivery by ~9 USD/tonne, with post-discount levels for orders over 20,000 tonnes at ~543 USD/tonne CIF Southern Vietnam, supported by high coking coal costs, improved domestic demand, and tight Indian supply. Vietnamese traders quoted mainstream ASEAN material at 541 USD/tonne CFR (up 4 USD WoW), Indonesian origin at 542 USD/tonne CFR, and domestic Vietnamese material traded around 540 USD/tonne CIF. Consequently, the spread between Indian material and mainstream ASEAN material widened to ~34 USD/tonne. Chinese material returned post-holiday at 520–530 USD/tonne CFR Port Klang (Malaysia), remaining below mainstream ASEAN levels and checking broader regional price gains.

Market Outlook

Secondary Impact of EU Policy Mechanisms: Turkish cargoes withdrawn from customs clearance will swallow Q1 quota allocations next year. Coupled with expected provisional anti-dumping duties, Turkish exports to Europe are unlikely to recover in the short term, accelerating the diversion of resources toward North Africa and the Americas and leaving export prices under pressure. India's Q4 EU quota was fully exhausted on October 8, closing the window for quota-cleared price premiums and forcing new orders into Q1 shipment windows. Indian offers to Europe face downward pressure from elevated levels, with some volume potentially diverting to Vietnam and the Middle East. The European Commission's targeted consultation on new quota rules ends on October 11, making potential quota adjustments a key focal point.
Pace of Post-Holiday Destocking in China: HRC social inventories have reached 4.915 million tonnes. If demand startup remains sluggish over the next 1–2 weeks and a second round of coke price cuts materializes, Chinese export quotes could retest 490 USD/tonne FOB. Whether Southeast Asia's latest list price hikes can hold depends on whether Chinese quotes can stabilize.
Indian Supply & Maritime Logistics Risks: If Tata Steel's maintenance shutdown lasts ~3 weeks, Indian domestic and export availability will tighten simultaneously, supporting quotes to both Europe and Asia. Continuous vessel attacks in the Black Sea and ongoing passage restrictions in the Strait of Hormuz will keep war risk premiums and freight rates elevated, continuing to push up landed costs on affected shipping routes.