Indian Steel Mills Conclude Over 150,000 MT HRC Export Orders in Last Couple of Weeks
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Indian steelmakers are actively exploring export options and have collectively booked around 150,000 MT of HRC in last 10-15 days majorly to Vietnam for July-Aug shipments, SteelMint learned from market sources.
Mills like Tata Steel, JSW and Essar Steel were actively seen booking HRC for exports to Vietnam in last couple of weeks in the price range of USD 505-520/t CFR Vietnam.
Why Indian mills turned active for exports ?
1. Hike in Global HRC prices- In last few weeks, Chinese HRC export offers have shown upside trend in the back of announced production cuts in Tangshan region along with resumption in trade talks with USA on imposition of tariffs on China. Thus imported HRC offers to Vietnam from China moved up by around USD 25-30/MT from USD 500/MT, CFR Vietnam in mid June'19 to USD 530/MT CFR Vietnam in first week of Jul'19.
On similar lines, imported HRC offers to Vietnam from India increased by USD 15-20/MT from USD 500-505/MT CFR in 3rd week of Jun'19 to USD 520-525/MT CFR basis in first week of Jul'19.
2. Vietnam's Formosa cut sales volume to reduce losses- As per market reports, Vietnam domestic integrated steelmaker Formosa Ha Tinh Corporation announced reduction in sales volumes of finished steel towards the end of Jun'19 in order to prevent further losses amid higher raw material cost. This led Vietnam based mills to procure HRC from Chinese and Indian mills.
3. Limited demand in Indian domestic market- Domestic HRC prices in India continued to remain under pressure over sluggish demand from auto sector and liquidity issues in trade segment. Also with the onset of monsoon season demand is less likely to pick up in domestic market.
SteelMint price assessment for domestic HRC prices hit 4 months low and is hovering around INR 40,000/MT (ex-Mumbai).Prices mentioned above are basic and extra GST @18% is applicable.
4. Increase in HR coil inventories - As per data maintained by Joint Plant Committee, HR coil stock increased 327,000 MT in end May'19 against beginning of Apr'19. Thus rising inventories could be another reason for mills to make active bookings for export.
