Global HRC Offers Rise, Buyers Hesitant to Make Bookings

HRC export offers in the global market rose for eighth consecutive week amid bullish sentiments, without being backed by any significant improvement in demand or supply cut.

The unprecedented surge in HRC prices started in China where its domestic flat products prices gained upward momentum post Lunar New Year Holidays in Feb’16. With improvement in country’s domestic HRC prices, its export offers also increased subsequently as sellers concentrated more on domestic sales.

Following Chinese sellers, exporters based in Japan, Korea, and CIS countries also followed suit and raised their flat products export offers.

Currently, China is offering HRC at USD 390-410/MT, FoB China whereas Japanese and Korean offers are heard at USD 390/MT and USD 420/MT respectively at FoB basis. CIS countries offers are at USD 410-415/MT, FoB Black Sea.

”Although sellers have risen their export offers, buyers are yet to accept it and hardly any deals are being heard at these levels. However, this cannot be continued for long and buyers will have to ultimately accept the raised offers as at present, mills hold stronger position in the market than buyers”, quoted an importer based in India.

Indian Buyers Showing Interest in Import Bookings

Post MIP, there has been an effective increase of INR 6,000-6,500/MT in Indian flat products prices resulting in landed cost of imports (at MIP rate) coming almost at par with domestic prices.

Currently landed cost of HRC import (at MIP rate of USD 445/MT) in India comes around USD 541/MT whereas domestic HRC prices on an average are assessed at USD 530/MT (INR 35,000/MT, ex-city basis).

As per market sources, Indian buyers have once again started showing interest in import bookings post MIP imposition in Feb’16. SteelMint has heard that HRC shipment of 30,000 tonnes from Hyundai-Korea have been booked for June delivery.

HRC Prices as on 13 Apr’16

*Because of MIP HRC cannot be imported below USD 445/MT
SteelMint Research