[SMM Steel] India Billet Export Indications Rise; HRC Export Activity Remains Cautious

HRC futures moved sideways today, with the most-traded HC2610 contract closing at 3,342 yuan/mt, edging up 0.09% on the day. In the spot market, most quotes remained stable and intraday trading was sluggish. SMM released its weekly balance data today, showing weekly production pulled back slightly and apparent demand continued to pull back. Inventory side, SMM’s national social HRC inventory across 86 warehouses (large sample) stood at 4.6308 million mt this week, up 132,700 mt (2.95%) MoM and up 29.86% YoY. By region, except for destocking in South China, all other regions saw inventory buildup, mainly due to earlier typhoon-driven sharp increases in arrivals combined with weak downstream demand, which further widened the buildup pace. News side, there were reports of supply deficit in Shanxi coal, and after the second round of coke price increases materialized, expectations for further increases persisted. Hence, with strong support from the cost side, HRC prices will stay high.

Metinvest’s Italian re-roller Ferriera Valsider has declared force majeure after an unexpected breakdown completely halted production at its Vallese di Oppeano plant near Verona, Italian-language steel trade outlet SteelOrbis reported on August 25. Metinvest separately confirmed the suspension in a statement provided to industry media, saying customers, suppliers and other stakeholders had been notified and technical teams were preparing the shortest possible repair plan; no restart timetable was available. The facility has annual capacity of up to 500,000tonnes of HRC and 300,000tonnes of plate and supplies around 3% of EU plate consumption, according to Ferriera Valsider. The company has not disclosed the cause of the breakdown, the equipment affected or the expected production loss.

[EU] EU HRC buyers remained cautious about accepting higher prices due to sufficient inventories and uncertainty over Q4 end-user demand. The Northwest European daily assessment edged down to approximately 853 USD/tonne EXW, while Italy held at around 840 USD/tonne EXW. A recent large EU mill transaction was concluded near 840 USD/tonne EXW, with Northwest European delivered indications at 864-875 USD/tonne. Supply constraints supported prices, but year-end destocking may limit further gains.