Persistent low buying interest in the traditional export markets, ie, Vietnam and the UAE, kept the Indian HRC market muted this week. SteelMint’s Indian HRC export index stood at $879/tonne (t) FOB east coast, unchanged for the second consecutive week.
However, there were a couple of deals booked in the past few days, which do not fall in the window of assessment.
- 15,000 tonnes (t) of Indian-origin HRCs were booked to South Korea at $930/t CFR for early Oct’21 delivery.
- 5,000 t of HRCs were booked to Europe at $1,010/t CFR for Jan’22 delivery.
After the recent price policy announced by Vietnamese steel manufacturers, buyers’ interest has shifted towards the domestic market over imported.
Rationale: Eight indicative prices were considered as T2 inputs while no major export deals were reported as T1. The final price was an average of T2 inputs which stood at $879/t FOB. The CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.
Global HRC market overview
1. China’s HRC export offers unchanged w-o-w: The current week’s export offers for HRC (SS400) from Chinese mills stand unchanged at $970-1,000/t FOB. After the generalised production curbs to maintain CY’20 levels, the government has further come up with an announcement of 30% cut in production across provinces to control energy consumption. This, along with the low buying interest in the overseas markets over high marine freight rates, kept export offers unaltered this week from major steel mills.
2. Sluggish demand drags down CIS export offers further: This week, offers from the Commonwealth of Independent States (CIS) dropped further by $15/t to $850-870/t FOB Black Sea compared to $865-885/t FOB a week ago. Persistent demand weakness continued to weigh on export offers from this region.
3. Vietnamese buyers shift focus to domestic procurement: With the domestic steel manufacturers Formosa and Hoa Phat announcing a cut in their offers, the buyers have turned to domestic procurement. Also, the People’s Committee of Ho Chi Minh City’s (HCMC) push towards phased reopening of the market has sent a spark in domestic demand.
On the other hand, major exporting countries continued to keep offers unchanged while, Russian mills increased their offers a bit.
- Vietnamese integrated steel major Formosa Ha Tinh (FHS) has reportedly lowered hot-rolled coil (HRC) prices for Nov’21 deliveries by $30-35/t. Current offers for HRC (skin passes) stand at $925-930/tonne (t) CIF compared to $955-960/t CIF for Oct’21 deliveries.
- Vietnam’s leading steel producer Hoa Phat reduced its monthly HRC (SAE 1006) prices to $900/t CIF Vietnam for Nov’21 delivery from the previous price of $905/t CIF basis for Oct’21.
Offers for the current week
a. Chinese tier- II and III mills’ offer hover around $910/t CFR.
b. Indian mills’ indicative offers stand unchanged at $890-900/t CFR.
c. Offers by Russian mills are at around $870-890/t CFR as against $850-860/t CFR a week back.
d. Offers from Japanese mills were heard at $1,010-1,020/t last week. However, no firm bids were reported on competitive offers from other nations.
4. Imported HRC offers to Pakistan resume: HRC (SS400) import offers from China stand at around $990/t CFR Karachi basis this week.
5. Russian mills raise HRC offers for Turkey: Trade sources informed that Russian-origin HRC is being offered at $910-915/t CFR Turkey against the previous week’s $890-900/t CFR levels.
Leave a Reply