Indian HRC export prices continue to head north despite limited trade

Indian mills are actively booking hot rolled coils (HRC) for exports to Europe amid higher realisations and increased quota limits. Moreover, a deal involving 1,000-2,000t HRC (S275) was reported to have been booked at $1,365/t CFR Europe towards the end of the previous week. This stands higher by $75/t from the previous deal heard at $1,290/t CFR.

• Higher realisations in EU market keep interest high: Increasing price levels with each subsequent deal is keeping Indian mills glued to the European market. Indian HRC export prices for EU have risen by over $250 since the first week of March. However, the bookings being reported recently are quite low in volumes compared with the previous ones. Thus, the concerns over suppiles to domestic markets is also being eased.
  
  
• Mills remain muted on offers to Vietnam: The low-priced HRCs available in the Vietnamese market have kept the interest of Indian mills at bay recently. The Chinese HRCs (SS400) are being offered at $920-930/t CFR levels, while the domestically produced SAE1006, (skinpasses) are available at $910-935/t CIF levels, a factor keeping the Indian mills out of the Vietnamese market.
  
  
• Mills resume offers to Middle East: Meanwhile, steel mills have resumed offering HRCs to the Middle East recently with indications at around $1,100-1,110/t CFR basis. With this, SteelMint's HRC export index stood at $1,065/t FOB east coast basis. However, there were no offers heard for Vietnam and Turkey this week.
  
  

Rationale: Five indicative prices were considered as T2 inputs, while there were no export deals (for Vietnam, Middle East) to be considered as T1. The final price was an average of T1 and T2 inputs which stood at $1,065/t FOB. The CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.

Outlook: Indian mills have announced another round of price hike this week in the domestic market. ArcelorMittal/Nippon Steel India (AM/NS India) has revised list prices of HRCs and CRCs by INR 1,000/t ($13/t) effective from 28 Mar'22, sources informed SteelMint. Effective prices of HRCs (2.5-8mm, IS 2062) now stand at INR 75,000-75,500/t ($987-994/t). However, absorption of price hikes in the trade segment amidst the prevalent need-based procurement scenario is a major challenge, as the end-user industry is struggling to pass on the costs to end consumers. Thus, mills may remain active in exports if domestic demand turns subdued.