SteelMint: Indian HRC export index rises further in recent trade

SteelMint's Indian HRC (SAE 1006) export index stands at $950/t FoB East-coast basis, up by $14/t w-o-w against $936/t FoB. Mills continue to raise HRC offers on higher price realizations and global bullish sentiments. Also, increased preference for Indian HRC cargoes among Vietnam importers leads to increased prices.

Deal concluded: A major private steel mill concluded an export deal of around 20,000 t HRC to Vietnam towards the weekend at $955/t CFR basis. However, this week witnessed an increase in offer following a hike in export offer from China.

The recent HRC export offers by Indian mills are as below:

• HRC export offers are at $970/t CFR Vietnam for May end-June shipments.
  
  
• HRC export offers stood around $980-985/t CFR Middle East for May end June shipments.
  
  
• HRC export price indications for Europe are at $1050/t CFR for June shipments.
  
  

Rationale: Ten indicative prices were considered as T2 inputs and one confirmed trade deal was considered as T1 with an average price of $950/t. The final price was an average of T1 and T2 inputs. The CFR prices were converted to FoB equivalent by deducting freight costs from the buyer/seller.

Global HRC market overview-

1. Chinese HRC export offer hits a new high- The Chinese HRC export offer has reached a new high point this week with offers ranging between $900-930/t FoB China basis. The offers have increased by over $15/t compared with an $885-930/t FoB basis a week back. The delay in the government's announcement on the export rebate cut from 13% to 9% or axing of the same has pushed mills to lift the offers.

2. CIS HRC export offers to increase sharply- The offers from the CIS region have shown a consistent increase over the past few weeks on higher overseas demand and rising global HRC offers. The current week offers have increased significantly by $35-45/t to $980-1,000/t FoB the Black Sea, contrasted against a $945-955/t FoB basis a week back.

3. Vietnamese importers shift preference to domestic HRC- As domestic HRC is available at a discount as compared to imports buyers shifted their interest to local buying. Also, the imported HRC offers witnessed further uptrend from major exporting nations on bullish global sentiments and rising global market demand.

Offers from major exporting nations
a) Indian mills are offering at $970/t CFR basis from this week
b) Chinese HRC offers are at $940-950/t CFR basis, while a few tier-I mills are offering at $1,000-1,020/t CFR basis after factoring the losses if export rebate cut is enacted.
c) Japanese mills are offering at $1,000/t CFR basis, unchanged against the previous week.

4. Japanese mills conclude an export deal to Pakistan- Two major Japanese steel mills were heard to have collectively booked 50,000 t HRC for export to Pakistan. The deal was concluded at a $1,010-1,015/t CFR basis for June delivery, SteelMint learned from Pakistan-based sources. Chinese mills are offering at $860/t CFR basis but on the condition that the buyer shall bear the losses arising out of the change in export rebate.

Outlook- In the purview of the current scenario the Indian HRC export offers are expected to remain strong, especially when the domestic demand is dull due to lockdown related barriers. Thus, the mills would make the most out of the overseas trades where the realizations are high.