SteelMint: Slow overseas demand pulls down India's HRC FoB index further

Demand in the overseas market continued to remain weak, pulling down India's HRC FoB index by $23/tonne (t) w-o-w. SteelMint's India HRC export index stood at $879/t FoB east-coast basis against the previous week's $902/t FoB India.

The Vietnamese market remains inclined towards the more competitive offers from other exporting countries, whereas trade has slowed down a bit in the Middle East region. Also, Covid-19 concerns in the Far East are affecting trade as well. These factors have collectively weighed on the HRC export offers from India.

"The EU market is expected to return with inquiries this week as they come out from the summer break. However, other markets are quite dull. There are hardly any takers for HRCs at $870/t CFR Vietnam," a reliable source informed SteelMint.

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 $879/t FoB. The CFR prices were converted to FoB equivalent by deducting freight costs from the buyer/seller.

Global HRC market overview

1. China's HRC export offers continue declining w-o-w: The export offers for HRC (SS400) from Chinese mills have come down further by $10/t to $970-990/t FoB China as against $970-1,000/t FoB in the previous week.

Mute trade, triggered due to competitive offers from other exporting nations, and a lack of clarity on the export tax imposition have kept importers away from the market.

2. Vietnam's imported HRC market remains subdued: Imported HRC offers into Vietnam continued to decline because of bearish market sentiments. Market participants are of the opinion that major domestic steel producers may cut their offers owing to rising Covid concerns and slow trade.

Current offers

i) Russian mills' quotes are at $860-870/t CFR.
ii) Indian HRC export offers were heard at $890-900/t CFR, lower against last week.
iii) Chinese major mills (tier- I, Benxi) are offering at $965-980/t CFR.

3. Pakistan-based importers book HRC from Kazakhstan: Importers in Pakistan were heard to have booked HRC from Kazakhstan early this week. The deal involves 20,000 t of HRCs at $925-930/t CFR Karachi basis.

However, Chinese steel mills continued to offer HRCs (SS400) to Pakistan at $940-950/t CFR, unchanged as against last week. Also, there were no offers heard from Japan and Taiwan for the current week.

4. Indian HRC offers to Nepal remain unchanged: HRC export offers from India to Nepal remain unchanged at $850-855/t CFR Raxual border.

It is to be noted that, last week, a couple of major Indian steel manufacturers had booked 10 rakes of HRCs for exports at $850-853/t CFR Raxual border, equivalent to $835/t exw basis. The shipments are for end-Sept'21.