India: SteelMint HRC export index rises $10/t; trades remain slow

• HRC export index at $690/t FOB
  
  
• Sentiments remain supported as China returns post holidays
  
  
• Export deal inked for Europe; offers up $20/t
  
  

SteelMint's India HRC (SAE1006) export index rose by $10/t to $690/t FOB east coast from $680/t FOB last week. Mills have mostly held back offers for Vietnam while indications are at around $720-730/t CFR UAE.

Indian mills are waiting for the domestic price announcement for February sales in the next few days before floating fresh export offers, sources hinted.

Rationale: Seven indicative prices were considered as T2 inputs while there were no trade deals to be considered as T1. The final price was an average of T1 and T2 inputs which stood at $690/t FOB. CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.

Factors driving Indian HRC export prices:

1. Offers to EU rise $20/t- A private Indian steel major booked a small parcel of HRC for export to Europe last week. The deal was closed at $780/t CFR Antwerp for end-February or early-March shipment. The deal price increased by $20/t from the previous deal. Meanwhile, fresh offers were quoted at $795-805/t CFR Antwerp this week against last week's $780/t CFR, sources informed.

Restocking activities have picked up pace in the European market since early January and a few export deals have been reported during January. Notably, prices have increased with each successive deal. Hence, Indian mills are inclined towards higher realisations being fetched from the European market.

2. Chinese mills raise prices post holidays- The Chinese market has started resuming activities after the Lunar New Year holidays. HRC (SS400) export offers to Vietnam from China were assessed at $670/t CFR. Meanwhile, the offer for HRC (SAE1006) stood around $680-685/t CFR this week, which was $650-660/t CFR before the holidays.

Similarly, Chinese HRC (SAE1006) export offers rose by $35-40/t to $720/t CFR UAE compared to the pre-holiday offer of $680-685/t CFR. Offers are for April shipments as Chinese mills have spent their allocations for March.

Thus, Indian mills are closely watching the market in expectation of further increase in prices before they float fresh indications.

Outlook
Indian HRC export offers may continue to rally in the near term. Domestic market sentiments have improved with prices on the rise in January. Hence mills are eyeing a price increase for February in the next few days. Furthermore, the increase in domestic iron ore and global HRC prices with Chinese mills returning to the market post holidays shall keep sentiments supported, SteelMint notes.