India: Mills focus on European markets for HRC exports on better realisations

• Indian HRC export prices for EU rise further by $70-75/t in recent deal
  
  
• Mills holding back offers for other markets in SE Asia and Middle East
  
  

Indian mills continued to increase their HRC export offers for the European countries since mid-Feb'22. A deal was concluded for 20,000 tonnes of HRCs at $1,090-1,100/t CFR end of last week for April- early May deliveries. The deal prices were higher by $70-75/t against the previous deal that was sealed at $1,020-1,025/t CFR for April dispatches.

The steel majors are now testing European markets with higher offers at $1,140-1,150/t CFR after witnessing increase in deal prices lately. Price competitiveness against those from the domestic mills in Europe has been the major driver for exports in this region. For instance, ArcelorMittal Europe is offering HRCs for domestic sales at euro 1,150/t ex-works ($1,253/t), which is about $100-110/t higher than what Indian mills are quoting. Market participants are expecting a further hike in offers in the near term.

On the other hand, Indian mills have remained quiet in the Southeast Asian and the Middle East markets since the last week of Feb'22 and have not been offering HRCs to Nepal since mid-Feb'22.

Imported HRC offers into Vietnam from China have been on a continuous rise since the end of Jan'22 when offers were at around $790/t CFR Vietnam. This week, offers have risen further by $30-35/t to $945-950/t CFR Vietnam from the levels of $910-920/t CFR Vietnam towards the end of the last week.

Outlook
Indian steel mills are likely to stay focused on the European markets amidst improved demand and higher realisations compared to other traditional export markets. Moreover, increasing prices of coal, oil and gas in the region will elevate European domestic steel prices, rendering imports as a viable option.

Furthermore, Indian mills are now eyeing May shipments as they have gradually filled their export order books for April shipments too.