Global HRC Export Offers Stable amid Quiet Market

While global HRC export offers remain stable, MIP imposition by Indian government forces Indian buyers to leave international purchase market thus creating pressure on global offers.

China’s flat steel market has remained stable even after four days have passed post one week New year holidays from 7 Feb to 13 Feb’16. Current HRC (2.5 mm) offers are assessed at USD 270-280/MT, FoB China.

The key reason being lack of movement in China’s domestic market. As per sources, prices in Chinese market will get a clear direction probably by next week when most end users will be completely back in the market from holidays.

HRC offers from Japan/Korea have also remained unchanged over last week at USD 280/MT, FoB basis. While offers from CIS countries are unaltered at USD 255-265/MT, FoB basis.

Import offers of HRC to UAE are up by USD 15-20/MT from China and Japan. Current HRC offers from China are assessed at USD 305-310/MT and from Japan/Korea at USD 320-325/MT, CNF Abu Dhabi basis. However as per market sources, Middle east nations are also struggling with subdued demand and it remains to be seen whether the market will absorb this increase in prices.

Increased Pressure on Global Offers Post MIP

Post MIP announcement, Indian buyers are focusing only on domestic offers, however import material will continue to be available in India as all the imports booked before 5 Feb’16 will arrive in India within 45-60 days.

As India imported about 0.7 MnT of HRC on an annual basis, with MIP imposition, most of the Indian importers will opt out of purchase market resulting in increased availability of HRC in global circuit which will create more pressure on global offers.

While MIP brought in some cheers to India’s domestic market, China based importers in India (in order to survive) are trying to diversify their business line by focusing more on imports of higher grade steel which are exempted from MIP.

HRC Prices as on 18 Feb’16

Source: SteelMint Research