SteelMint: Indian mills conclude HRC export deals to UAE, index up marginally

SteelMint's India HRC export index stands at $915/tonne (t) FoB east-coast basis, an increase of around $27/t as against $888/t FoB seen a week ago.

Major Indian steel producers have collectively booked around 40,000 t of HRCs for exports to the UAE for Aug-Sept 21 shipments. The deal price was in the range of $975-980/t CFR, sources informed SteelMint.

Indian mills shift interest to the UAE due to the following reasons:

• Mills are gaining higher price realisations as compared to the domestic market.
  
  
• Lower appetite for HRCs from the Vietnam market since it is under lockdown due to increased Covid cases.
  
  
• Sluggish demand and lower sales volumes in the trade market.
  
  
• Indian HRC export quotas to Europe have been exhausted.
  
  

Along with this, Indian steel mills may announce a roll-over of their list prices of HRC for August deliveries due to subdued demand and limited buying activity among traders. However, no official announcement has yet been made.

Rationale: Six indicative prices were considered as T2 inputs and three deals are considered as T1 input. The final price was an average of T1 and T2 inputs which stood at $915/t FoB. The CFR prices were converted to FoB equivalent by deducting freight costs from the buyer/seller.

Global HRC market overview

1. Chinese mills raise HRC export offers- The major Chinese mills are quoting HRC export offers in the range of $1,000-1,040/t FoB basis this week. The last heard offers were at $950-1,000/t, a couple of weeks back.

However, buying activity in the overseas market remained low since the risk will be borne by the buyers after the announcement of an export tax as per the contract clause. Meanwhile, a significant increase in Covid-19 cases in the South East Asian countries has led to subdued demand.

2. CIS-origin HRC offers decline w-o-w- Continuing with the downtrend, steel mills in the CIS region have declined their HRC export offer this week. Current HRC offers stand at $915-925/t FoB Black Sea as compared to $915- 930/t FoB last week.

3. Vietnamese mill concludes HRC export deal to EU- Recently, a Vietnamese steel mill booked a 20,000t HRC export deal to Europe for Sept delivery at $970/t FoB Vietnam. Mills started eyeing exports on better overseas demand to offset the sluggish demand in the domestic market. Furthermore, the steel hub of Ho Chi Minh City (HCMC) remains the most impacted region due to the lockdown announced to combat rising Covid cases.

Imported HRC offers to Vietnam for the week:

i) Chinese mills resume offers at around $1,000/t CFR.

ii) Russian mills increase offers to $910/t CFR, from $890/t a week ago.

iii) Indian mills maintain the levels of $930-935/t CFR.

iv) Japanese mills are offering at $1,010/t CFR.

4. Imported HRC offers to Pakistan- The Chinese mills rolled out quotes at $1,010-1,020/t CFR Pakistan basis for Sept delivery. However, trade offers are heard to be at around $980-990/t CFR basis.

Offers from other exporting nations:

a) Japanese mills are offering at $1,050-1,060/t CFR.

b) Taiwanese mills are quoting at $1,040-1,050/t CFR.

c) No offers were heard from South Korea this week.