SteelMint: Indian HRC export trade quiet on sufficient bookings; index unchanged

• Mills booked till March, yet to aggressively open offers for Apr
  
  
• Market awaits clarity as Chinese steel futures take a drop
  
  

The Indian steel giants have held back from actively offering hot rolled coils (HRC) for exports this week. Mills are not aggressive in the overseas markets as their appetite has thinned for the time being with robust export bookings made in the past few weeks.

SteelMint's India HRC (SAE1006) export index remains pegged at $867/t FOB east coast.

Region-wise market update

• Mills booked for March shipments: The Indian steel majors held back this week and will open up their offers in the coming weeks for April shipments. The bulk HRC export volumes stood at 462,336 tonnes (t) in Jan'22, as per the vessel line-up data maintained by SteelMint. Furthermore, Indian mills have likely booked around 1.14 mnt of HRCs for exports for February and March shipments, as per SteelMint.
  
  
• Bid-offer disparity: Offers for Indian origin cargoes are much higher than the bid levels from importing countries, majorly Vietnam and Turkey. Offers from India for Turkey shot up to $930-940/t CFR towards the end of the previous week. This happened after an export deal of 20,000 t of HRCs (SAE1006) was heard to have been concluded at $915/t CFR Turkey. However, this deal could not be confirmed at that time.
  
  
• Vietnam's domestic HRC offers remain competitive despite Formosa's price hike: Yesterday, the Vietnamese steel major, Formosa Ha Tinh, announced an increase of $95/t for HRCs (SAE1006, skinpass), pushing up the offers to $845/t CIF Ho Chi Minh for April sales. Hoa Phat is likely to announce its prices in the next few days. No firm offers from Indian mills were heard recently but a few mill-side indications were at $925-930/t CFR Vietnam.
  
  
• Chinese HRC futures witness a steep drop: The Chinese SHFE HRC futures May contract witnessed a significant drop of RMB 85/t ($13/t) d-o-d, and closed at RMB 4,843/t ($764/t)as on 15 Feb'22 compared to RMB 4,928/t ($777/t) a day back. This turned sentiments a bit bearish today.
  
  

Outlook
Mills may remain less active in the export market this week. However, they may focus on domestic sales. Furthermore, the second round of price hike is expected of the steel majors after AM/NS India took the second hike of INR 500/t in HRCs for Feb'22 sales a week back.