India: SteelMint HRC export index drops $20/t in recent deals

Indian mills have resumed offering hot-rolled coils (HRC) for exports to Vietnam and the UAE after a gap of around two weeks. Interestingly, apart from their usual destinations (the UAE, Vietnam and Europe), mills managed to clinch a deal to Turkey as well last week.

SteelMint's Indian HRC (SAE 1006) export index stands at $1,010/tonne (t) FoB east-coast basis, down by $20/t against $1,030/t FoB week-on-week (w-o-w).

Deal concluded:A major private steel-maker is reported to have booked a cargo of around 20,000 t of HRC on 7 June'21 to the UAE at $1,050-1,055/t CFR for July 21 shipments.

Mills resume HRC export offers to Vietnam: This week, major Indian mills are offering HRC to Vietnam at $1,030-1,050/t CFR basis for Jul'21 shipments but no major deal has been concluded yet as Vietnam re-rollers are waiting for domestic price announcements.

Mills explore export opportunities to Turkey: A major Indian steel manufacturer is reported to have booked around 20,000 t of HRC for exports to Turkey last week, credible sources informed SteelMint. The deal price stood at around $1,015-1,020/t CFR for Jul'21 shipments.

Due to subdued domestic demand and higher local prices, domestic sales continue to remain dampened. Hence, mills are focusing on HRC exports to global markets.

Rationale
Seven indicative prices were considered as T2 inputs and deal in considered as T1. The final price was an average of T1 and T2 inputs which stood at $1,010/t FoB. The CFR prices were converted to FoB equivalent by deducting freight costs from the buyer/seller.

Global HRC market overview:
1.Chinese HRC export offers: In China, tier 1 mills are offering HRC at around $990-1,000/t FoB whereas smaller tier 2 mills are offering at around $940-950/t FoB. There are strong rumours that the Chinese government will announce 11% additional export duty on HRC from mid-July 21, SteelMint learned from credible sources. However, no official announcement has been made yet.

2.CIS-origin HRC export offers decline: An increase in competition and a cautious approach of buyers weighed on the export offers from the CIS. The offers have moved down by $45/t this week. This week's offers are assessed at around $995-1,020/t FoB Black Sea, which was around $1,035-1,065/t FoB a week ago.

3.Vietnam buyers await price revision from Formosa: Due to much chaos in imported HRC offers from major exporting nations, Vietnam re-rollers are preferring domestic HRCs. "Buyers are waiting for Formosa and Hoa Phat offers. They will release prices soon," said a source. Also, domestic offers are cost-effective as compared to imported offers.

4.Imported HRC offers to Pakistan unchanged: The Chinese mills continued to offer HRC at $950/t CFR Pakistan. However, a few tier-I mills are offering higher at $1,000/t CFR basis. Meanwhile, a Japanese mill is offering around $1,100/t CFR for July-Aug'21 shipments.

5. Imported HRC offers to Nepal: Imported HRC offers to Nepal stood at $960/t (ex-plant) which translate into $980-990/t CFR basis for July shipments. However no major deals have been reported yet.