- SteelMint’s India HRC export index at $615/t FOB
- Mills quote higher offers for Middle East, EU
- Chinese mills booked for March shipments
- Higher offers by Chinese suppliers supporting global HRC prices
SteelMint’s India HRC (SAE1006) export index rose by $15/t to $615/t FOB east coast from $600/t a week back. The index is hovering at a six-month high level, as per data maintained with SteelMint. Only a few mills have floated offers for buyers in the Middle East and Vietnam amid improved global sentiments and prices, sources informed. Meanwhile, another factor is higher offers from China as Chinese mills have spent their export allocations for March 2023 shipments.
Rationale: Twelve 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 $615/t FOB. CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.
“Most of the major Indian mills have kept their offers on hold in anticipation of further increase in offers on the global HRC trading platform in coming weeks,” a source informed.
Factors driving Indian HRC export prices:
1. Limited export allocation from Chinese mills- Not many Chinese mills are actively offering in the market currently. “Chinese mills have booked around 300,000 t of HRC in the past three weeks, majorly to the Vietnamese and Turkish markets,” a source highlighted. Also, most of the Chinese mills have exhausted their export allocations for March shipments just before the market slows down during the Lunar New Year holidays (21-27 January), the source added.
Moreover, the Chinese SHFE HRC (May 2023 contract) settled higher by RMB 58/t w-o-w at RMB 4,157 as on 10 January 2023. Another factor prompting mills to continue raising export offers.
2. Hike in offers by leading overseas mills – The world’s top steel manufacturer, Baosteel, has raised its monthly HRC, CRC and heavy plate prices by RMB 100/t ($15/t), while it rolled over prices for HDG for February sales, sources informed. The company has raised prices for the second consecutive month amid rising global and Chinese domestic HRC prices.
Vietnam’s leading steel mill Formosa Ha Tinh has increased its HRC (SAE 1006, skin pass) prices to $640/t CIF HCMC for March and early April sales. This has pushed Chinese and Indian mills to quote higher. Vietnamese integrated steel major Hoa Phat is expected to announce its prices in the next few days.
3. Return of EU from holidays – Indian steel mills raised HRC (S275) export offers by $45-$50/t to $720-725/t CFR Antwerp compared to $670-680/t CFR seen a couple of weeks back. The rise in global HRC offers and the expectation of improved restocking demand in the EU has led to the rise in offers. However, the market has remained inactive over the past couple of weeks amid the New Year holidays.
Near-term outlook:
Indian HRC offers for the overseas markets are likely to increase in the near term. Market participants opine that Chinese mills are raising their offers further for April deliveries ahead of the Lunar New Year holidays to keep pushing global HRC prices higher.
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