India: HRC export index falls $25/t as overseas demand wanes

Indian HRC export offers fell by about $25/tonne (t) this week with buyers turning observant in key markets. Decline in global HRC offers have weighed on buying sentiments. SteelMint's HRC export index stands at around $815/t FOB east coast India.

Rationale: Seven indicative prices were considered as T2 inputs while no major export deals were reported as T1. The final price was an average of T1 and T2 inputs which stood at $815/t FOB. The CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.

Reasons weighing down Indian HRC export prices

1. Vietnam's imported HRC market silent: Buyers in Vietnam are sourcing HRCs domestically which has reduced their reliance on imported materials lately. Indian mills reduced quotes to around $850-860/t CFR from $855-860/t CFR a week back. However, a trade source highlighted that Indian-origin HRCs are being offered at around $830/t CFR, although the deal could not be confirmed till the time of publishing this report. Buyers are expecting further decline in offers in the near term and holding back bookings, a trader highlighted.

2. UAE market inactive: The market in UAE has not been active after last booking a couple of weeks back. Meanwhile, Indian mills have continued offering at $890/t CFR UAE, while bids were heard at $850/t CFR.

3. Nepal buyers holding back bookings: There have been limited enquiries from Nepal lately. "There are limited allocations with Indian mills for Nepal, as they are fully booked till Jan'21," said a few reliable sources.

4. Decline in global HRC prices: Prices for hot-rolled coils are on a decline in the global market. On a weekly basis, the offers for Chinese HRC have declined by $5/t while those from Japan and South Korea have dipped by $20/t.

China HRC (SS400) export offers stand at $775-785/t FOB. Price indications for Japanese and South Korean HRCs stand at around $920-930/t FOB.

Thus, the Indian HRC export market is expected to remain subdued amid lower bids.