Domestic trade market prices for HRC and CRC corrected on the back of sluggish re-stocking demand from distributors. Buying interest remains low at these price levels as the overseas markets observed a steep price correction and have been on a continual decline since the beginning of the month.
SteelMint’s benchmark price assessment for HRC (2.5-8 mm IS 2062) stands at around INR 70,500-71,000/t (exy-Mumbai) while CRC (IS 513 Gr O, 0.9mm) prices are at INR 75,500-76,000/t (exy-Mumbai). The prices mentioned exclude GST @18%.
Overseas demand weakens on falling global prices: The Indian HRC (SAE1006) export offers dropped by $35/t w-o-w. With this, SteelMint’s Indian HRC export index stands at $840/t FOB east coast in the current week.
The overseas buyers bidding at lower levels amid a continual decline in Chinese HRC export offers have led to a decline in both export offers and volumes. Bids from Vietnamese buyers were heard at around $840-850/t CFR, while indicative offers from India were at $855/t CFR a few days back.
However, towards the previous weekend, an export deal for a small parcel of 20,000 t of HRCs was concluded at $890/t CFR UAE for Dec’21 delivery. It is to be noted that Indian mills had maintained offers at $910-920/t CFR levels for both Vietnam and the UAE for the past few weeks.
Falling raw material prices: Prices of raw materials such as iron ore and coking coal have witnessed a decline in the past two weeks. Imported coking coal (premium HCC, Australian origin) now stands at around $419.80/t CNF India, falling from the all-time high of $431.50/t CNF two weeks back.
Meanwhile, SteelMint’s iron ore fines (0-10mm, Fe 63%) index price has dropped by about INR 150/t to INR 6,750/t (assessed on 13 Nov’21) compared to INR 6,900 a couple of weeks back. Also, the global iron ore index has dropped $40/t m-o-m which is likely to keep iron ore price levels under pressure in the near term.
This, in turn, has weighed on buyers’ sentiments.
Analysis of Import scenario:
Currently, China is offering HRCs at $815/t CIF India basis which is competitive against domestic trade market prices. However, the interest towards booking HRCs for imports is currently low as traders are contemplating that domestic prices will correct further in the near term.
Meanwhile, the top exporters to India- the Japanese and South Korean mills- are having low allocations for exports at present as they continue catering to domestic demand. Also, HRC export offer from these two countries is at $975/t CIF India, and at a premium against the Indian domestic market price, making it an unviable option.
Near term outlook
The trade market prices are likely to remain under pressure in the near term on the back of falling overseas market offers. Distributors are of the view that if the overseas prices continue on a downtrend, Indian mills are likely to announce rebates in the near term.
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