SteelMint: Indian HRC export index continues rallying on global cues

• SteelMint's India HRC export index at $633/t FOB
  
  
• Mills quote higher offers for Middle East, EU
  
  
• Chinese mills booked for March shipments
  
  
• Chinese and Vietnamese markets slow down on holiday mood
  
  

SteelMint's India HRC (SAE1006) export index rose by $18/t to $633/t FOB east coast from $615/t FOB a week back. The rally in global HRC offers and the anticipation of further rise in offers post the Chinese Lunar New Year and Vietnamese Tet holidays are keeping the momentum strong.

Rationale: Eleven indicative prices were considered as T2 inputs while there were no trade deals to be considered as T1. The final price was an average of T1 and T2 inputs which stood at $633/t FOB. CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.

Factors driving Indian HRC export prices:

1. Chinese mills raise HRC export offers- Chinese mills have continuously increased their HRC export offers on the global platform since end-November. Chinese HRC (SS400) export offers that were assessed at $545/t FOB Rizhao on 29 November, 2022 rose to $645/t FOB this week, as per SteelMint's records.

"Chinese mills have been packed for March 2023 deliveries and shall raise their quotes further for April post the Lunar New Year holidays (21 - 27 January)," hinted a reliable source. Also, not many Chinese mills are actively offering in the market currently, he added.

2. Buying interest improving in the overseas markets - Buying interest in the overseas markets of the Middle East (ME) and Vietnam are seen improving. HRC offers to ME have seen a rally over the past couple of weeks from both India and China.

In the current week, Chinese-origin HRC (SAE1006) export offers stood around $650/t CFR Vietnam (up, $15/t w-o-w) and $680-685/t CFR UAE (up, $30/t w-o-w). While that of Indian-origin HRCs were indicated around $650-660/t CFR Vietnam (up, $20/t w-o-w) and $670-680/t CFR UAE (up, $18/t w-o-w).

3. Bookings heard for EU- Indian mills have turned active in the European market post-export duty removal. Also, Europe being a better realisation fetching market has kept the Indian mills enticed and agressive in their approach. A private Indian HRC producer was heard to have booked around 35,000t for exports last week at about $745-750/t CFR. Delivery is expected in end-February or early-March. However, the deal could not get confirmed till the time of publishing this report.

Current indications stand around $750/t CFR Antwerp, up from the previous week's $708/t CFR.

Outlook
Indian HRC offers for the overseas markets are likely to rally in the near-term. Expectation of higher global HRC export offers post-Lunar New Holidays in China and Tet in Vietnam are among the leading sentiment boosters. Moreover, European buyers are also making import bookings which shall keep the global market sentiments buoyant.