Indian HRC (SAE 1006) export index increased slightly this week on higher offers from China and other major exporting nations post-Lunar New year holidays.
SteelMint’s index of HRC (SAE 1006) index stands at $717/t FoB East coast basis against $715/t FoB last week. Along with this, freight rates have moved up by $5-7/t for both Vietnam and UAE, highlighted sources.
Indian mills are exploring export opportunities due to subdued buying in the domestic market. Mills have recently resumed HRC export offers for Vietnam after a long gap and continue to offer to UAE and Europe at higher prices.
Also, mills are planning to increase their export allocations for Mar-Apr shipments, SteelMint learned from its trade channels.
Rationale:
Five indicative prices were considered as T2 inputs, with an average price of $717/t FoB. The final price was an average of T2 inputs due to the absence of confirmed trades (T1). The CFR prices were converted to FoB equivalent by deducting freight costs from the buyer/seller.
Global HRC offers increase sharply post Lunar New Year holidays:
1. Chinese HRC export offer shoots up post CNY holidays- Chinese mills raised offers by around $50/t this week which stands at around $690-710/t FoB basis. Last week, offers were in the range of $640-650/t FoB basis with the market remaining mute on CNY holidays. Furthermore, tier-I mills were heard to be offering high at $720-730/t FoB basis. Rally in the futures market coupled with the rising global inflation along with market buzz about export rebate cuts increased HRC export offers.
2. CIS origin HRC export offers rise w-o-w- CIS origin HRC witnessed an increase this week by $15-20/t in their export offers. The current week offer was assessed at $705-725/t FoB Black Sea, which was $690-705/t FoB basis a week ago. A rise in global offers and an increase in scrap prices led to higher offerings from the mills.
3. Imported HRC offers to Vietnam continue to increase- Major exporting nations have continued to increase their export offers post-holidays. Chinese mills have steeply raised their offers by $50/t w-o-w and are offering at $720-730/t CFR Vietnam. Meanwhile, a tier-I mill is offering higher at $760/t CFR basis. Last week, a major tier-I mill had booked 10,000 t HRC for exports to Vietnam at a $720/t CFR basis for end Mar-Apr delivery. Japanese and South Korean mills are offering to Vietnam at $780/t and $790/t CFR basis respectively.
4. Imported HRC offers to Pakistan- Offers from Chinese mills spiked by $30/t as the market reopened after the holidays. Current offers stand at $720/t CFR Pakistan for HRC (SAE1006) and $710/t CFR basis for HRC (SS400). Offers from other regions viz Japan and South Korea rose by $20/t to $800/t CFR basis, while Taiwanese mills are offering at $795/t CFR basis (up by $35/t).
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