SteelMint’s Indian HRC (SAE 1006) export index stands at $970/t FoB East-coast basis, up by $20/t w-o-w against $950/t FoB basis. Indian mills have lifted HRC export offers to $1,000-1,020/t CFR basis for Vietnam. Limited trades were reported due to holidays in Vietnam.
Rationale: Ten indicative prices were considered as T2 inputs at an average price of $970/t.The final price was an average of T2 inputs. The CFR prices were converted to FoB equivalent by deducting freight costs from the buyer/seller.
Reasons driving HRC export index are mentioned below:
1.China’s recent revision on steel tariffs-
China has finally annulled the 13% value-added tax (VAT) rebate on exports of 146 steel products from 1 May ’21 that include hot-rolled coil (HRC), wire rod and rebar as well as cold-rolled and galvanized sheets, according to a statement issued by the country’s Ministry of Finance. This is expected to lower steel exports from China in order to boost domestic consumption. The offers this week are assessed at $960-970/t FoB China compared against the previous week’s $900-930/t FoB basis.
2.Europe’s ArcelorMittal raised HRC offer by Euro 20 ($24)
Europe’s largest steel producer- ArcelorMittal has further raised its coil prices. The current price of HRC stands at around Euro 1,020/t compared to Euro 1,000/t in the previous week. SteelMint learned from credible sources. Meanwhile, the company’s CRC and hot-dipped galvanized offers stand at around Euro 1,200/t.
3.Indian mills raise domestic HRC prices by around INR 3000-4000/t- Indian steel mills lifted HRC and CRC prices thrice in last month for April deliveries. In May companies have again lifted prices. Recently JSW Steel increased HRC prices by INR 3,500/t and offered HRC at around INR 65,000-65,500/t (exy-Mumbai). Also, AM/NS India lifted HRC prices by INR 4000/t and offered at INR 67,000-67,500/t. Prices do not include GST extra @18%
4.Imported HRC offers for Vietnam continues to surge- The offers have further increased by $60/t amidst the recent developments of China’s export rebate cut, and Indian mills consistently increasing HRC export prices. With this, the offers from all major exporting nations have breached the $1,000/t mark.
- Chinese mills are offering at $1,000-1,010/t CFR basis, against the previous week’s $940-950/t CFR basis.
- Indian mills in similar lines are offering at $1,010-1,020/t CFR basis as against $970/t CFR basis a week back
Outlook- Indian HRC export offers are anticipated to remain high on higher export realizations as compared to domestic markets. Also frequent lockdown in various states of India and lower domestic sales may open opportunity for increased exports in near term
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