SteelMint’s India HRC (SAE1006) export index remained stable w-o-w at $712/t FOB east coast this week as the market activity in the Middle East has slowed down amid the Ramadan festival. However, Indian mills continue to quote offers at the similar levels even though Chinese HRC offers dropped last week.
Rationale: No confirmed deal (T1) was reported in this publishing window. Nine indicative prices were considered as T2 inputs out of twelve inputs received. The final price was an average of T1 and T2 inputs, which stood at $712/t FOB. CFR prices were converted to FOB by deducting freight costs from the buyer or seller.
Market-wise updates:
1. Offers for UAE range-bound w-o-w: Indian HRC (SAE1006) export offers for the UAE market remained range-bound this week. Offers stood at around $740-750/t CFR. Mills have kept offers firm as allocations for April deliveries have depleted, whereas buyers have slowed down procurement during the holy month of Ramadan, informed a source. Moreover, offers from China dropped by $20-25/t w-o-w to $680-690/t CFR this week.
2. Vietnamese buyers cling to domestic supplies: Vietnamese buyers are more inclined towards domestic supplies due to shorter delivery lead times. Formosa Ha Tinh (FHS) announced its domestic HRCs (SAE1006, skin passed) prices at $732/t CIF Ho Chi Minh City (HCMC) for May and early June 2023 sales. Chinese mills offered HRC (SAE1006) around 655-670/t CFR Vietnam this week, a drop of $20-30/t w-o-w. “Even though Chinese offers are competitive against domestic prices, these stand non-lucrative for buyers. Offers from Indian mills have been absent in the market for over a month,” informed a source.
3. Indian HRC export prices for EU stay firm: Indian HRC export (S275) offers remained stable at $835-840/t CFR EU in a recent deal. A private Indian steel major booked a very small quantity of HRCs for export at $835/t CFR Antwerp and $840/t CFR UK last week. However, the quantity remained elusive. Lengthening lead times and increasing offers in the domestic market could stimulate demand for imported HRCs in Europe.
Outlook: Indian HRC export offers have remained stable this week even as a drop was seen in Chinese export offers last week. Also, HRC futures for May 2023 delivery contract on the Shanghai Futures Exchange (SHFE) decreased by RMB 43/t ($6/t) w-o-w to RMB 4,258/t ($619/t) against RMB 4,301/t ($625/t) a week ago.
Mills are looking to raise domestic HRC list prices for early-April sales, factoring in elevated iron ore prices and good export exposure. Post this, they may announce fresh offers for exports.
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