- HRC export index at $680/t FOB
- Mills quote higher offers for Middle East
- Export deal inked for Europe; fresh offers up $30/t
- Holiday mood prevails in China and Vietnam
SteelMint’s India HRC (SAE1006) export index rose steeply by $47/t to $680/t FOB east coast from $633/t FOB last week. Indian mills came up with higher offers for the Middle East market this week, expecting further increase in global export offers after the Lunar New Year holidays. The index is hovering at a 7-month high level, as per SteelMint data.
Rationale: Eleven 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 $680/t FOB. CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.
Factors driving Indian HRC export prices:
1. Offers to EU rise $30/t- A private Indian steel major booked around 5,000 t of hot rolled coils (S275) for export to Europe last week. The deal was closed at $760/t CFR Antwerp for end-February or early-March shipment. Meanwhile, fresh offers were quoted at $780/t CFR Antwerp this week against last week’s $730/t CFR, sources informed.
Previously, around 35,000 t HRC was booked for exports in the second week of January at about $745-750/t CFR. Delivery is expected in end-February or early-March.
2. Chinese mills may raise offers post holidays- Offers by Indian mills are rallying in anticipation of higher Chinese HRC offers post holidays. For instance, a few Chinese mills floated offers at $650-660/t CFR for Vietnam just before the holidays – higher by $5-10/t compared to last week’s offer of $650/t CFR. No firm offer from Indian mills was heard for Vietnam.
“Chinese mills have spent their HRC export allocations for March shipments and shall raise their quotes further for April post the Lunar New Year holidays (21 – 27 January),” hinted a source.
3. Export offers to UAE rise sharply by $50/t: Indian mills are also mostly spent out for February dispatches and shall now open up for March shipments. Thus, they are now eyeing higher offers in the overseas markets. Current offers are at around $715-720/t CFR UAE, which were around $670-680/t CFR a week back.
“The UAE market needs to improve and speculation of higher offers from China in the coming week is rife,” hinted a UAE-based source.
Outlook
Indian HRC export offers may continue to rally in the near term. Improving domestic market sentiments and mills taking interim price hikes in Jaunary are also lending support to export offers. Moreover, expectation of higher global HRC export offers post Lunar New Year Holidays in China and the Tet holidays in Vietnam keeps sentiments buoyed.
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