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Indian mills increase HRC export offers further by $20-25 for Vietnam

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BigMint Bureau

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26 Apr 2021, 19:50 IST

Indian mills increase HRC export offers further by $20-25 for Vietnam

Indian mills sharply raised HRC export offers to Vietnam by around $20-25/t w-o-w on bullish global market trends. A major private Indian steel mill is offering re-rolling grade HRC at $970/t CFR Vietnam for June shipments.

However, towards the beginning of the last week, the offers stood in the range of $940-950/t CFR basis. According to market sources, a private steel mill booked 20,000 t HRC at around $955/t CFR Vietnam towards the closing of last week, however it could not be confirmed till the time of publishing this report.

Along with this, Chinese mills have raised their offer further to $940-950/t CFR basis, against a $930-940/t CFR basis seen early last week. Japanese mills have kept the offers unchanged at a $1,000/t CFR basis.

Key factors driving imported HRC offers-

1.Bullish trend in global market- Last week a major private steelmaker based in Western India booked around 30,000 t HRC t to UAE at $985-990/t CFR basis for June shipments. Also, on 22 Apr'21, Europe's leading steel mill- ArcelorMittal increased the coil prices by Euro 30/t. The revised price of HRC stands at around Euro 1,000/t against its previous offer of Euro 970/t floated previous week. Thus Indian mills have shifted their focus to exports on higher price realizations and eyeing for higher HRC export offers to Vietnam market as well

2.Improved demand in the country- The demand is on a rise from the downstream industries mainly from galvanized steel producers and auto component manufacturers. Furthermore, the Vietnamese automobile industry has reported growth in sales volume at 30,935 units in Mar '21 units contrasted against 13,585 units in Feb '21, as per Vietnam Automobile Manufacturers' Association (VAMA) report.

3.Higher raw material prices- Imported scrap prices in Vietnam have risen further by $15-20 towards the closing of last week. Few trades have been reported on increased offers.

Costly imports lead to increased preference for domestic products- On the other hand, HRC imports from major exporting nations remain costlier as compared to domestic material. Formosa Ha Tinh offers for HRC (SAE 1006) skin pass at $910-912/t CIF basis and non-skin pass offers to stand around $905-907/t CIF basis. Meanwhile Hoa Phat offers for HRC (SAE 1006) stands at around $895-900/t CIF basis for June shipments. Thus domestic HRC are discounted of around $50-60/t against the HRC offers from Indian and Chinese mills

Near term outlook- SteelMint expects that despite a preference for domestic products, imported HRC offers will continue to remain strong in the near term as the demand is expected to be robust in the near future.

Since Chinese mills have been factoring the expected reduction in export duty rebates in their contracts, SteelMint understands. Meanwhile, Indian mills are comfortable doing export business at higher offers. Also, the steel consumption of the country is expected to rise by 8% as per the Vietnam steel association (VSA).