India: SteelMint’s HRC export index drops marginally, active bookings reported

Rumours of a hike in Chinese steel export tariffs have resulted in Chinese mills keeping away from actively offering HRCs for export, benefitting Indian players. SteelMint’s India HRC export index stands at $888/t FoB east-coast basis, reporting a drop of $8/t as against $896/t FoB seen a week ago.

Mills have actively concluded HRC export deals to South Korea and Vietnam for Aug-Sept shipments. However, firm price indications/offers were heard for Middle East and Turkey as well.

Recent deal concluded:

• A major government-owned steel mill has booked 20,000 t HRC (SS400) for exports to Vietnam. The deal was concluded at around $915/t CFR basis for Aug-Sept’21 shipment.
• Last week major integrated steel mills booked over 30,000 t of HRCs to South Korea at around $945-950/t CFR basis for Aug-Sept shipments.
• Mills are offering HRCs for the Middle East at around $970/t CFR basis and Turkey at about $950-955/t CFR basis. However, no major deals have been concluded this week.

Rationale: Eleven indicative prices were considered as T2 inputs and one deal is considered as T1 input. Deals booked for South Korea are not considered for index value. The final price was an average of T1 and T2 inputs which stood at $888/t FoB. The CFR prices were converted to FoB equivalent by deducting freight costs from the buyer/seller.

Global HRC market overview

1. Chinese mills hold back from offering over export tax concerns- The Chinese steel mills have refrained from quoting offers this week. The market went abuzz with speculations over an official announcement regarding the export tax to be made in early Aug’21. The previous week’s levels for Chinese HRC (SS400) stood around $940-950/t FoB basis. Yet, some tier-I mills have been quoting offers at higher ranges of $1,000-1,030/t FoB. Also, the typhoon IN-FA has disrupted both the land and sea-side logistics in the eastern provinces of the country.

2. CIS-origin HRC offers decline w-o-w- The offers for CIS-origin HRCs saw a decline of around $5-10/t. The current week’s assessed offers stand at around $915-930/t FoB Black Sea as against $920-940/t FoB a week ago.

3. Imported HRC offers to Vietnam range-bound- The imported HRC offers to Vietnam have remained similar to those seen in the previous week. Increased restrictions due to the lockdown till 1 Aug’21 in Ho Chi Minh City (HCMC) and the economic hub-cum-capital Hanoi have dented the demand in the country.

Offers from major exporting countries:

• Indian mills are offering HRCs in the range of $930-935/t CFR Vietnam.
• Russian mills continued offering at $890/t CFR. The export tax shall be effective from 1 Aug’21, which has kept the offers still at a discount.
• Chinese mills did not quote offers this week amid rumours about an official announcement regarding the export tax levy.
• There were no offers from Japan and South Korea for this week.

4. Japanese mill books 20,000 t of HRCs for exports to Pakistan: A Japanese steel mill was heard to have booked 20,000 t of HRCs for exports at $1,060-1,070/t CFR Pakistan for Aug-Sept’21 shipment. Meanwhile, South Korea is offering HRCs at $1,065/t CFR and Taiwan, at $1,080/t CFR basis.