SteelMint: India HRC export index falls to 9-month low, trade improves marginally

SteelMint's India HRC (SAE1006) export index dropped to a 9-month low, after falling by $25/tonne (t) w-o-w to $725/t FOB east coast. Similar levels were last witnessed in early Mar'21. Meanwhile, trade activities have picked up marginally on lower prices. However, significant trade volumes in exports stand awaited which may somehow ease selling pressure on mills.

Rationale: Thirteen indicative prices were considered as T2 inputs, while no export deals were reported as T1. The final price was an average of T1 and T2 inputs which stood at $725/t FOB. The CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.

• Increasing Covid cases in Vietnam pull down prices to 9-month low:
  With global HRC export offers softening over the past 3 months and domestic mills reducing prices, buyers have increased their preference for domestically produced HRCs. Imported HRC offers to Vietnam have fallen by about $25-30/t this week from most of the exporting countries. Indian mills were heard offering at $755-760/t CFR Vietnam, with bids being received at $740-750/t CFR whereas Chinese mills were heard offering at $795/t CFR against the previous week's $810/t CFR. An unconfirmed trade was heard to be concluded for 20,000 t of Indian-origin HRC (SAE 1006) at around $755/t, CFR Vietnam. Vietnam, by far, has gone through four waves of the coronavirus, resulting in a slowdown in domestic activities, especially in the capital, Hanoi.
  
  
• Mills reduce offers for Middle-East:
  Indian mills have reduced their offers by $15/t this week for the Middle East region. Where offers stood at around $780/t CFR a week back, a few mills are quoting around $765/t CFR this week. "Market participants are biding their time in anticipation of further decline in offers, and will most likely come with inquiries post the Christmas and New Year holidays," SteelMint learned from UAE-based sources.
  
  
• Mills remain active in exploring other markets:
  With the traditional markets slowing down on trades, Indian mills are exploring new markets like Saudi Arabia and Egypt. Where a deal for Saudi Arabia was heard a week back, an Indian mill has booked 10,000 t HRC (2-10mm) for exports at $810/t CFR Egypt for end-Jan - early-Feb'22 deliveries earlier this week. Another private mill was heard to have booked 4-rakes of re-rolling grade HRCs at $765-770/t CFR Raxaul border (equivalent to $720-725/t ex-plant), earlier this week.
  
  

Outlook
The Indian mills shall continue to explore new markets amid slow demand both in domestic and traditional overseas markets. Europe is facing an energy crisis. Gas prices in Europe hit a new high last week. Forward prices have more than doubled over the past month. However, the issues around the energy crisis in Europe and increasing prices of electricity there may give some relief to Indian mills to regain their steel export volumes. SteelMint heard some small parcels of HRCs being booked to Spain, but confirmation could not be received till the time of publishing.