- SteelMint’s India HRC export index at $597/t FOB, hits five-month high
- Limited deals reported at increased offers
- Major mills withdrew export offers yet again
The Indian HRC (SAE1006) export index rose further by $37/tonne (t) this week, hitting a five-month high mark. SteelMint’s India HRC export index was assessed at $597/t FoB east coast with the mills having quoted higher offers towards last weekend. Also, export offers witnessed increase on the global HRC trade platform this week. These levels were last seen in mid-July, 2022.
Similar to last week, a few Indian mills were heard to have withdrawn export offers post-the increase. Indian HRC export offers rose to $620-630/t CFR Vietnam, $640-650/t CFR UAE, and $660-680/t CFR Antwerp (EU) prior to the withdrawal.
An export deal of 2,000 t of HRCs was heard concluded at $660/t CFR Europe last week. However, falling out of the purview of the export index valuation, it is not considered in the computation.
Rationale: Fourteen indicative prices were considered as T2 inputs while there were no trade deals to be considered as T1. The final price was an average of T1 and T2 inputs which stood at $597/t FOB. CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.
Hike in global HRC offers
Countries across the global have increased domestic sales and exports offers recently, which counts among the leading reason behind the higher quotes from India as well.
a) Chinese HRC export offers continued rising for the third week, with an increase of $10/t this week. HRC (SS400) export offers stood at around $600/t FOB Rizhao, up from the levels of $590/t a week ago. Also, the Chinese steel major, Baosteel, raised its domestic HRC prices by RMB 200/t for January 2023 sales, earlier this month.
b) Japanese steel major Nippon Steel has increased its hot-rolled coil (HRC) export offers by $70/t to $600/t FOB for early-February shipments. The previous offers stood at $525/t FOB for dispatches till end-January, as per data maintained with SteelMint.
c) Another major factor is the increase in the domestic market prices by the European mills. ArcelorMittal was heard to have increased its domestic HRC sales prices by Euro 50/t to Euro 680/t.
d) Vietnamese domestic HRC producers also raised their offers for February and early-March 2023 sales last week. Formosa Ha Tinh’s offer for HRCs (SAE1006, skinpassed) stood around $610/t CIF HCMC (up, $55/t) while Hoa Phat’s non-skinpassed were at $595/t CIF (up $53/t).
However, Chinese domestic HRC offers have seen a drop following decline in futures in the past couple of days. China’s SHFE HRC (May 2023 contract) futures settled at RMB 3,983/t today, down by RMB 42/t as against RMB 4,025/t on 13 December 2022. This has slightly weakened the market sentiments since yesterday.
Outlook: The aftermath of the removal of the export duty saw Indian mills booking good volumes to the traditional markets of Middle East, Vietnam and Europe for December and January deliveries. Thus, mills are facing a challenge of limited allocations for exports for January shipments and are mulling higher offers for February sales. Also, Indian mills are likely to increase their list prices for January 2023 sales in the domestic market, informed reliable sources.
Meanwhile, the Christmas and New Year holidays are closing in, hence it is being anticipated that market activities will slow down in the coming days.
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