India: SteelMint HRC export index drops marginally in recent trading

Indian mills have been active this week in exploring HRC export opportunities to the UAE and Turkey. However, bids from Vietnam remained limited owing to preference for domestic HRC. SteelMint’s Indian HRC (SAE 1006) export index stands at $990/tonne (t) FoB east-coast basis, down by $5/t against $995/t FoB week-on-week (w-o-w) in recent deals concluded to the UAE

Recent deals:

• A major private steelmaker based in western India booked 20,000 t of HRC to the UAE at $1,030/t CFR.
• Another mill booked 15,000- 20,000 t of HRC to the UAE at around 1,030-1,040/t CFR basis.

Meanwhile, indicative offers to Vietnam are heard at around $1,000/t CFR basis. However, weak buying interest from re-rollers owing to cheaper domestic offers led to muted trade from India.

There was also an unconfirmed trade heard, for around 20,000 t of Indian HRC to Italy at $1,080-1,090/t CFR basis for Jul-Aug’21 shipments.

Rationale
Five indicative prices were considered as T2 inputs and two deals were considered as T1 inputs which stood at $990/t FoB. The CFR prices were converted to FoB equivalent by deducting freight costs from the buyer/seller.

Global HRC market overview

 1.China HRC export offers decline: Chinese-origin HRC export offers move down slightly $5/t w-o-w to $940-945/t FoB basis. Last week’s offers stood at around $940-950/t FoB basis.

Reasons:

•  Importers are in wait-and-watch mode amid a lack of clarity on export tax concerns.
• South East Asian markets are less active due to the Covid-19 wave.

2.Vietnam importers stick to domestic procurements: Vietnam-based importers continue to focus on sourcing HRC from domestic steel producers Formosa and Hoa Phat for the following reasons.

• Domestic offers being lucrative against high-priced imported HRCs.
• Lack of clarity on levy of an export tax by the Chinese government.
• Russian origin HRC-MMK resumes offers at $1,100/t CFR basis.