Indian HRC export offers to Europe rise further by $50/t w-o-w

• HRC export prices for EU rise to $1,300/t CFR
• No firm offers heard for Vietnam, UAE
• Indian mills to benefit as EU redistributes steel import quotas

Indian steel majors are quoting HRC at $1,300/t CFR Europe, up $50/t from last week’s levels of $1,250/t. Towards the last weekend, a deal for 5,000-10,000 t of HRC was heard booked at around $1,290/t CFR Europe for May delivery. However, the deal could not be confirmed till the time of publishing this report.

Factors fuelling prices:

• Redistribution of HRC import quotas by EU: Soaring raw material prices and disruptions in supplies to Europe from the countries around the Black Sea region have opened up avenues for increased exports from India. Moreover, the European Commission (EU) has revised their HRC quarterly quotas for Apr-Jun’22 to 273,178 t as against 166,028 t in Jan-Mar’22, providing more room for exports from India.
• HRC prices in Europe continue to rally: ArcelorMittal Europe further increased prices by Euro 100/t ($110/t) in the third week of March. After the hike, offers are now at Euro 1,400/t ($1,540/t) for HRC, Euro 1,500/t ($1,650/t) for CRC and Euro 1,550/t ($1,705/t) for hot-dipped galvanised coils. Prior to this, the manufacturer had announced two hikes of Euro 180/t ($200/t) and Euro 150/t ($166/t) respectively in the first two weeks of the month.
• Supply curbs from CIS: Steel exports from Belarus and Russia will drop significantly during the three-month transition period following the export ban and will cease fully thereafter. Metinvest’s steel mill in Azovstal, one of Europe’s largest, tethered on the brink of destruction as Russian forces captured Ukraine’s Mariupol city. The mill has reportedly ordered production cuts and shut down temporarily due to constant bombardment. Azovstal, one of the largest steel mills in Ukraine with an annual crude steel capacity of 5.3 mnt, might take two years to resume operations.

Indian mills remain inactive in SE Asia and Middle East: Booked for April deliveries and now offering for May, Indian steel mills continued to keep offers on hold for the traditional exports markets of Vietnam and Middle East. Moreover, the Vietnamese domestic mills, Formosa Ha Tinh and Hoa Phat, are offering HRC (SAE1006, skinpass) at $930/t CIF Ho Chi Minh City (HCMC) and $910/t CIF for May- early June sales, keeping the buyers enticed.

Chinese HRC prices move up despite Covid concerns: The Chinese mills increased their HRC export offers for the Vietnamese and Middle East markets this week despite increased concerns over rising Covid cases. Offers from China continue to remain competitive at around $915/t CFR Vietnam (up $15/t, w-o-w), yet due to high lead times buyers are preferring domestic HRC. Offers for the Middle East stand at around $1,000/t CFR, up $20/t as against the previous week.