Indian HRC (SAE 1006) export index dropped sharply by $37/t on a weekly basis and stands at $715/t FoB basis. Indian mills have been active in exploring export opportunities due to subdued buying in the domestic market. Mills have recently booked export parcels for UAE and Europe, however, no deals were heard for Vietnam amid ongoing Tet holidays.
Trade deal considered for index calculation:
A private Indian steel manufacturer has concluded an export deal for 15,000-20,000 t HRC (re-rolling grade) for end Mar’21 shipments. The deal was concluded in the range of $735-740/t CFR basis, Prices have come down by $35-40 w-o-w against last week’s offer of $770-780/t CFR basis.
Indian steelmakers are preferring to export HRC to UAE and European countries on higher prices realizations amid bearish sentiments in the domestic market. Another private steel mill booked 10,000-12,000 t HRC to Europe at $810-815/t CFR Antwerp for Mar- Apr shipments. However, this deal is not considered for index calculation.
Meanwhile, Vietnam is closed due to Tet holidays. No active offers were heard from India. After the holidays HRC offers are expected to pick up in Vietnam and China.
Rationale:
Three indicative prices were considered as T2 inputs, and one confirmed trade deal is considered as T1 with an average price of $715/t. The final price was an average of T1 and T2 inputs. The CFR prices were converted to FoB equivalent by deducting freight costs from the buyer/seller.
Global HRC market snapshot-
1. China’s HRC market remains mute on holiday-
The Lunar New Year holidays until 17 Feb continues to keep the Chinese market muted. Last offers from the mills were heard around $640-650/t FoB China. It is anticipated that Chinese steel manufacturers shall increase their offers as the market activities resume after the holiday period.
2. CIS origin HRC export offers to weaken further-
Low buying interest in the major importing nations because of higher prices and observant buyers continue to weigh on the CIS origin HRC export offers. The current week assessed offers stand in the range of $690-705/t FoB Black Sea, which was $690-715/t FoB basis a week back.
3. Imported HRC offers to Vietnam remain unchanged-
All major exporting nations have kept their offers unchanged and are awaiting clarity on price direction. Markets in China and Vietnam are expected to reopen from 18th Feb. Before the holidays, Tier 2 mills in China had been offering at $670-690/t CFR Vietnam basis, and tier 1 mills offering at $710/t CFR basis. Meanwhile, offers from Japanese and South Korean mills continue to hover at $760-770/t CFR Vietnam basis.
4. Imported HRC offers to Pakistan-
Indicative offers from Taiwanese mills stood at $760/t CFR Pakistan, up from $755/t CFR basis a week back. Indicative offers from the South Korean and Japanese mills stand at a $780/t CFR basis. Meanwhile, it is widely anticipated that Chinese mills will resume their offers post-Lunar New Year holidays.
5. Imported HRC offers to Nepal-
Indian mill is offering HRC to Nepal at around $760/t ex-mill basis. However, market sources shared that workable price is around $740-750/t ex-mill. Meanwhile, no major deals have been concluded yet.
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