SteelMint: Indian HRC prices range-bound, sentiments improve slightly

Trade reference prices of India's hot-rolled coils (HRC) in the key markets continued to remain largely stable for the past three weeks. Also, there was a slight increase in inquiries in the northern and western markets, SteelMint learned from credible sources.

According to steel producers, a drop in HRC prices is unlikely considering -

1. Good export order books for Feb'22: Indian steel manufacturers have reported good bookings for Feb'22 and are now fully booked for the month. This might keep supplies tight and lend some support to domestic prices. Furthermore, SteelMint's India HRC (SAE1006) export index increased marginally to $722/tonne (t) FOB east coast with an increase in offers to major export destinations.

• Nepal: Offers are up by $25/t to $775-780/t CFR Raxaul border.
  
  
• Vietnam: Offers are around $750-755/t CFR, up from last week's $745/t.
  
  
• UAE: Indications are around $760-770/t CFR, up from $755-765/t CFR a week back.
  
  

2. Rising imported coking coal prices: The increase in coking coal prices is another major factor that mills may consider in their upcoming price revision announcements. The Australian-origin premium hard coking coal (HCC) prices spiked by $123/t q-o-q to $398/t CFR Paradip, India in Q3FY'22 against $274.61/t CFR in Q2. Furthermore, the weekly average prices stood at $410/t CFR as of the previous week, up by $73/t from $337/t CFR at the beginning of Dec'21.

3. Demand recovery in exports market: Indian steel majors anticipate a pickup in demand from the overseas nations in Mar'22. Avenues for exports shall open up in South East Asia with low allocations from China in February on the Lunar New Year holidays and a slower return of participants, impacting the March production and trades.

Furthermore, sentiments in the European Union seem to be improving with domestic producers signing the long term contracts with end-users, pushing up prices by Euro 500/t ($567/t) y-o-y. Also, domestic prices in the EU are likely to increase on rising energy costs which shall open gates for imports at competitive prices.

Indian HRC exports to Italy, Spain and Belgium have shown a significant increase in CY'21 against the preceding year.