SteelMint: India's HRC FoB Index drops marginally in absence of deals

SteelMint's India HRC export index stood at $911/tonne (t) FoB east-coast basis against the previous week's $915/t FoB India. The absence of active trades in the overseas market resulted in bearish sentiments in the export market.

Offers remained largely stable due to:

1. Vietnamese buyers preferring domestic HRC because of extended lockdown in the country.
2. UAE importers have already procured material for September shipments.
3. Offers to Europe are heard at around a $1,030-1,040/t CFR basis. However, no major deals have been booked yet.

Along with this, Indian mills have kept domestic HRC prices stable due to bearish trade market sentiments.

Rationale: Eight indicative prices were considered as T2 inputs while no major export deals were reported as T1. The final price was an average of T2 inputs which stood at $911/t FoB. The CFR prices were converted to FoB equivalent by deducting freight costs from the buyer/seller.

Global HRC market overview

1. Chinese HRC export offers decline w-o-w- The nation's HRC export offers have come down by $10/t w-o-w. Lack of clarity on the export tax announcement, increased marine freight rates and logistical disruptions due to Covid-19 have sent both buyers and sellers to the sidelines. The current week's assessed offers stand at around $1,000-1,020/t FoB China, which were $1,000-1,030/t FoB a week ago.

2. CIS-origin HRC offers decline over dull demand- The export offers from the CIS region fell by $5/t w-o-w, on the back of slow demand in key outlets. The current week's offers are heard at around $915-925/t FoB Black Sea as against $920-930/t FoB a week back.

3. Imported HRC offers to Vietnam: The imported HRC offers from Chinese mills are now being heard at $970-980/t CFR Vietnam. However, Chinese mills had resumed with offers of $970-1,000/t CFR, yesterday. The monsoon's seasonal lull and surging Covid-19 cases in and around Ho Chi Minh City (HCMC) have weighed on the demand.

Offers from other countries

a. Indian mills are offering at $925-930/t CFR.
b. Russian offers are around $880/t CFR.
c. No firm offers were received from Japan or South Korea.

4. Hoa Phat cuts Oct'21 prices by $20/t- Vietnamese steel major Hoa Phat has reduced its price for HRC (SAE1006, skin pass) by $20/t for October shipment. The effective price after revision stands at $900-905/t CIF Vietnam.

5. Imported HRC offers to Pakistan- The current week's offers from Pakistan have declined by $20/t w-o-w to stand at $990-1,000/t CFR Pakistan as against $1,010-1,020/t CFR a week back. Also, the Japanese mills are offering higher at $1,040-1,060/t CFR while offers from Taiwan stand at $1,030-1,050/t CFR.