Indian mills book around 190,000 t of steel for exports last week on restocking demand*

The Indian steel export market witnessed a fresh wave of optimism last week with around 190,000 t* of bookings being confirmed by SteelMint. Exports have picked up mainly on restocking demand ahead of the Chinese Lunar New Year holidays starting 1 Feb'22.

Indian mills booked around 90,000 t* billets for exports last week. A state-owned steelmaker concluded an export tender for spot sale of 60,000 t of blast furnace steel blooms (150x150mm, 3SP/4SP grade) on 14 Jan. Mills had concluded billet and bloom export tenders earlier, with bookings reported for even high-grade billet.

SteelMint's assessment for BF billet exports for 150x50mm, 3SP/4SP grade material, stood at $600/tonne (t) FOB on 12 Jan, up $10/t w-o-w.

Apart from semi-finished steel, a leading mill booked 30,000 t of HRC for exports to Vietnam for Feb shipment at $750-752/t CFR. Nearly 80,000 t HRC export deals were concluded last week for Vietnam and Turkey.

SteelMint's India HRC (SAE1006) export index remained largely stable this week at $720/tonne (t) FOB east coast with a couple of deals reported to Nepal and Vietnam.

In the longs segment, India's rebar export prices rose by $10/t on the week, as per SteelMint assessment. The current assessment for BF-route (B500B) rebar stands at $715-720/t CFR Hong Kong on actual weight (AW) basis. Mills are likely to lift offers, as per sources.

Steel futures rise

Rebar futures contracts on the Shanghai Futures Exchange (SHFE) for May'22 delivery closed at RMB 4,664/tonne ($734/t) on 14 Jan'22, a sharp rise of RMB 138/t ($22/t) on week and a rise of RMB 31/t ($5/t), d-o-d.

Following the recovery in futures, billet prices in China's Tangshan rose to $691/t on 12 Jan, including 13% VAT - an increase of RMB $19/t w-o-w. Likewise, China's billet import prices rose to $630/t on CFR basis on 14 Jan, an increase of $30/t on the week.

Coking coal prices surge

Export sentiment is currently strong as traders are taking positions due to the uptrend in coking coal prices that are fuelling the rise in steel prices.

Australian premium hard coking coal prices have risen by over 14% w-o-w to $409/t FOB from $358/t. Prices are on the rise due to tight supply amid strong demand in China and the Asian markets.

Coking coal futures on the Singapore Exchange (SGX) hit an all-time high of $415.75/t on 14 Jan, supported by stronger Australian and global prices around tight supplies and recent disruptions to logistics in North America, Canada and Australia.

However, prices are expected to correct as weather disruptions cease in the major supply centres and China enters the week-long New Year holiday.

Domestic prices may tick up

The rise in global iron ore and coal prices amid restocking demand by Chinese mills are boosting steel product prices. Domestic flat steel prices may find support due to the upswing in HRC export prices, SteelMint notes.

Meanwhile, prices of finished long products may increase by around INR 1,500/t with demand from the construction sector likely to pick up and the bar on construction activities in Delhi and NCR region being lifted. Domestic prices are still at a discount to international prices and mills may raise prices this week.

* Correction: Billet export volume has been corrected from 150,000t to 90,000t