SteelMint: Indian HRC export index rises by $12 on strong demand

SteelMint's Indian HRC (SAE 1006) export index witnessed a considerable increase of $12/t w-o-w and stands at a $607/t FoB basis. A steep hike in Chinese export offers on strong futures resulted in bullish sentiments in global prices following which Indian steel mills also raised their export offers.

Another reason attributed to higher export offers is limited allocation on robust sales and higher price realizations in the domestic market. Indian steel mills have raised domestic prices by around INR 1,000-2,000/t in Dec'20.

Deals reported - A private steel mill was heard to have booked around 30,000 t HRC to Vietnam at $615/t CFR. However, the booking couldn't be confirmed while publishing this report.

Meanwhile, Indian mills are more inclined towards European markets amid better prices and higher realizations. Recently an Indian private mill booked HRC for Europe at $670/t CFR (translates to $ 630/t FoB India) for Jan'21 shipments, SteelMint learned from market sources.

Four indicative prices were considered as T2 inputs, with an average price of $607/t. The final price was an average of T2 inputs due to the absence of confirmed trades (T1). The CFR prices were converted to FoB equivalent by deducting freight costs from the buyer/seller.

Global HRC market overview -

• Chinese HRC export offers rise steeply amid improved demand- The Chinese steel mills announced a steep hike of $25/t w-o-w basis and are offering HRC for exports at $590-595/t FoB China. Continual gains in the futures market, higher domestic market prices, and improved demand from a few major importing countries, especially Vietnam resulted in higher offers.
  
  
• CIS origin HRC export offers spike on tightened supplies- Following the surge of $25 in the preceding week, the CIS origin HRC export offers have further spiked by $60-63. The current week offers stand at $608-620/t FoB Black Sea in contrast with $545-560/t a week ago. Higher demand and tightening supplies continue to push the offers on the higher side.
  
  
• Imported HRC offers to Vietnam further up by $10/t w-o-w- Spanning to nearly two years high in the preceding week, the Chinese mills further raised their offers by $10 for Vietnamese importers. Also, the demand-supply mismatch in Vietnam has led to an increased preference for imported HRC. The current assessed offer stands at $610/t CFR Vietnam as against $600/t in the preceding week.A couple of import deals were heard to have been concluded at $603-610/t CFR basis from China in the previous week.
  
  
• Pakistan mills await Chinese HRC offers- Imported HRC offers from Chinese mills had increased by $25 in the middle of the previous week and were heard at $610/t CFR Pakistan for SS400 and $615/t CFR basis for SAE 1006. The market sources in Pakistan anticipate a further hike of $10-15 in the fresh offers which is expected to be out in next few days.
  
  
• Indian HRC offers for Nepal - Indian HRC export for Nepal was last heard at $625-630/t ex-mill (equivalent to $645-650/t CFR Raxual border) for Jan-Feb'21 shipments