India’s HRC export market has continued to remain under pressure on the back of limited bids. Also, Indian mills are not very actively offering in the for exports market as they have just announced a domestic price correction of INR 1,500-2,000/t for Jul’21.
SteelMint’s Indian HRC (SAE 1006) export index stands at $912/tonne (t) FoB east-coast basis, down by $8/t against $920/t FoB w-o-w. Lower bids from major importing nations, especially Vietnam and the UAE, led to the downside in HRC offers from India. Vietnamese buyers were silent on bids as they preferred to wait for local-based Formosa Ha Tinh’s new price announcements this week. Buyers are expecting that local prices will be cheaper over imported HRCs, hence, they have adopted a wait-and-watch stance.
The UAE buyers have completed one round of bookings at higher offers and now are aiming for lower HRC offers from India. Last deals were booked at $1,030-1,040/t CFR but now they are eyeing not more than $970-980/t CFR basis for Aug-Sept’21 shipments.
Meanwhile, due to exhausted quotas to Europe, the mills are unable to conclude deals at higher prices and looking at traditional export destinations with lower offers. These factors, in turn, resulted in lower HRC offers from India. However, no major deals have been concluded yet.
Rationale
Nine indicative prices were considered as T2 inputs which stood at $912/t FoB. The CFR prices were converted to FoB equivalent by deducting freight costs from the buyer/seller.
Global HRC market overview
1. Chinese HRC export offers under pressure- In view of limited trade in the overseas market, the Chinese HRC export offers have dropped this week by around $5-10/t. Current offers stand in the range of $930-935/t FoB China in comparison with $940-945/t FoB a week ago.
2. CIS-origin HRC export offers fall w-o-w- The export offers for CIS origin HRCs continued to fall after the announcement of temporary export duties at 15% or $155/t. However, this will come into effect from 1 Aug’21 but it led to bearish sentiments in the market. The export offers for the current week stand around $945-955/t FoB Black Sea, down from the previous week’s $955-985/t FoB basis.
3. Vietnam market turns slow due to monsoon- Vietnam-based traders and buyers have moved away from booking imported HRCs majorly due to the following concerns:
a) Beginning of the monsoon.
b) Impending announcement of price revisions by domestic mills in the next few days.
c)Also, fewer offers were heard from the Chinese and Indian mills. Chinese mills are offering HRCs at $920-930/t CFR Vietnam while Indian mills are quoting at $920-940/t CFR basis.
4. Imported HRC offers to Pakistan inconsistent- Chinese mills have rolled out offers at $910/t CFR Pakistan this week. The previous offer of $950/t CFR was heard at the beginning of Jun’21. However, offers for the position cargoes are heard at around an $850/t CFR.
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