SteelMint’s Indian HRC (SAE 1006) export index stands at $995/tonne (t) FoB east-coast basis, down by $15/t against $1,010/t FoB week-on-week (w-o-w). The absence of buying interest among Vietnam re-rollers for Indian-origin HRC resulted in a drop in export offers.
However, last week, Indian mills collectively booked around 80,000 t of HRC to the UAE at $1,030-1,050/t CFR for July-August shipments.
Meanwhile, the European Commission (EC) extended its steel safeguard measures for another three years rather than the expected one-year period. The proposal includes a 3% increase in quota volumes, rather than 5%.The proposed extension will come into effect on 1 Jul’21. After this move, Indian steel mills will resume HRC exports to Europe at elevated levels.
Rationale-
Twelve indicative prices were considered as T2 inputs. The final price was an average of T2 inputs which stood at $995/t FoB. The CFR prices were converted to FoB equivalent by deducting freight costs from the buyer/seller.
Global HRC market overview
1.China HRC export offers unchanged: This week, Chinese HRC export offers remained unchanged at $940-950/t FoB basis for the second straight week. Recent holidays due to the Dragon Boat Festival fueled uncertainty over the announcement date of the expected export tax. Also, this has kept buying interest low. Overseas buyers have continued to remain on the sidelines.
2.CIS-origin HRC export offers stable on the week: CIS-origin HRC exports continued to hover at around $995-1,020/t FoB Black Sea, stable against the preceding week. Last week, offers had fallen by around $45/t.A slump in overseas demand, owing to an expected announcement of an export tax by the Chinese government has weighed on the export offers in the past couple of weeks.
3.Vietnam rerollers prefer domestic HRC over imported: Formosa Ha Tinh has announced a roll-over in its price policy for Aug’21 and continues to offer HRC skin passes at $1,032/t CIF and non-skin passes at $1,027/t CIF basis. Hoa Phat, on the other hand, has cut its Aug’21 offers for pipe grade HRCs by $50-55/t m-o-m, and now offers are at a $965-970/t CIF basis.HRC offers from Chinese mills like Rizhao and Shagang were heard at around $985/t, CFR Vietnam .
4.Japan floats imported HRC offers to Pakistan after a gap: Japanese mills have resumed floating HRC export offers to Pakistan after a month’s gap. New offers stand at around $1,085/t CFR basis, against about $1,070/t CFR basis in mid-May.
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