Indian Steel Mills Book HRC for Export to Middle East - Sources
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Indian steel mills have turned active and are exporting significant quantities of HRC to overseas nations. After booking considerable quantities of over 120,000 MT to Vietnam and Malaysia, Indian mills have also booked material for Middle East.
Recently market sources shared with SteelMint that,a major Indian mill based in western India has concluded a deal of around 10,000 MT of HRC with Middle East for August shipments.
The deal price is around USD 615/MT CFR basis.The vessel freight from India to Middle East is around USD 20-25/MT. As per sources the cargo has been shipped to UAE.
As per data maintained with SteelMint, UAE occupied 9-10% share in Indian flat steel exports which stood at 0.19 MnT in Jan- Apr'18 which was 0.46 MnT in Jan-Apr'17.
Indian steel exporters are banking on HRC exports due to following reasons:
1.Sluggish demand in domestic market- Indian steel mills witnessed dull demand and weak buying in domestic market.Bearish sentiments amid higher prices of flat steel has resultant to limited bookings of material in domestic market.Thus slow movement of material has kept the domestic flat steel prices under pressure. Prices in domestic traders market have weakened by INR 500/MT in last one month.
2.Indian Rupee hits all time low against USD-The Indian Rupee was one of the resilient currencies in the world till the beginning of 2018. Since 2018, it has tumbled about 8% in value against the US dollar. The Rupee on Thursday morning hit an all time low to 69 per US dollar.The root cause is higher crude oil prices in global market which has reached to USD 77-78 a barrel against USD 75.49 a month back.
Thus Indian steel exporters have started focusing on exports as it will benefit them on Rupee depreciation.
3.Increase in Indian flat steel production- According to JPC ( Joint Plant Committee) data released by Indian government,Indian flat steel production for sale in FY19 ( Apr- May'18) stood at 8.29 MnT up by 2% against 8.13 MnT in FY 18 (Apr-May'17)
