SteelMint: India's HRC export index flat on muted trade

SteelMint's India HRC export index stood at $915/tonne (t) FoB east-coast basis, unchanged over the previous week. Thus, mills have largely kept their HRC export offers stable due to the absence of active trading in the overseas markets.

Offers remained stable due to:

a) Lockdowns in Vietnam on spiking Covid-19 cases, mainly in the steel hub of Ho Chi Minh City (HCMC) and neighbouring regions.

b) Exhausted quotas in the European Union.

c) Last week, Indian mills had reportedly booked 40,000 t of HRC for exports to the UAE at $975-980/t CFR basis for Aug-Sept'21 shipments.

"The steel mills are decently booked until Sept'21 and might start offering for Oct'21 shipments in the upcoming weeks," a credible market source informed SteelMint.

Rationale: Six indicative prices were considered as T2 inputs while there were no export deals reported (T1 input). The final price was an average of 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- Most of the Chinese steel exporters have held back their offers after the recent market buzz of 10-15% or 15-20% export duty on HRC on 15 Aug'21. However, there has been no official announcement on this yet.

The current week's assessed offer for HRC (SS400) stands at around $1,000-1,030/t FoB China compared to $1,000-1,040/t FoB a week back. Furthermore, the allocations for exports stand low due to recent production curbs ahead of the Winter Olympic Games to be held on 4-20 Feb'22.

On an additional note, the global market has a lower appetite for Chinese-origin HRC on the contract clause of buyers' shouldering losses in case of the new export tax. Also, the traditional markets in the South-East Asian region continue to reel under the surging Covid-19 cases, which has severely impacted demand in this region.

2. CIS-origin HRC offers increase w-o-w- CIS-origin HRC offers have increased by $5/t w-o-w. Current HRC offers stand at $920-930/t FoB Black Sea as compared to $915- 925/t FoB last week. After the announcement of an export tax adjustment of 15% from Russia, the offers have increased slightly in the region.

3. Vietnamese importers book low-priced HRCs from Russia- Vietnamese importers were heard to have booked about 60,000 t of HRC (position cargo) from Russia recently. The deal was concluded at $905-910/t CFR Vietnam for mid-Nov delivery. The cheaper alternatives available in the overseas market are enticing Vietnamese importers, although demand in Vietnam is low amid the extension of lockdowns on surging Covid cases.

4. Imported HRC offers to Pakistan- Chinese steel mills continued to offer imported HRC to Pakistan at $1,010-1,020/t CFR Pakistan basis. However, there were no offers heard from other regions of Japan, Taiwan, and South Korea this week.