Indian mills lift HRC export offers on sufficient bookings; index rises sharply

• Mills raise HRC export offers by $45-60/t for Mar’22 shipments
• Bid-offer disparities limit trade at increased offers
• Mills largely booked for Feb shipments

Indian mills have significantly increased their HRC export offers by $45-60/tonne (t) this week to the key export markets after having booked decent quantities for export previously this month. SteelMint’s India HRC (SAE1006) export index spiked up to $780/t FOB east coast.

Current week offer from India:

• $810-815/t CFR Vietnam, up from $750-755/t CFR a week back.
• $815-825/t CFR Middle East. Last week it was $765/t CFR.
• $910-920/t CFR Europe as against $860-880/t CFR a week back.
• A deal for 15,000-20,000t HRC was heard concluded at $810/t CFR Turkey, up by $40/t.
• For Nepal, the offer stands around $820-825/t CFR Raxual Border (translating to $800-810/t ex-plant), up from the previous week’s $775-780/t CFR levels.

Rationale: Sixteen indicative prices were considered as T2 inputs, while no export deals were reported as T1. The final price was an average of T1 and T2 inputs which stood at $780/t FOB. The CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.

Most of the Indian steel majors are under no pressure to sell as they hold decent quantities in their export books for February shipment. Furthermore, they are eyeing an increase of about INR 1,500/t ($20/t) in their list prices domestic market sales in the upcoming week. This has led to higher offer quotes from the mills.

However, the demand in the importing countries is relatively slow owing to the below factors:

• Bid-offer disparity keeps the UAE market inactive: The UAE-based buyers are showing buying interest at $760-770/t CFR, which is quite low compared with what the mills are offering. This has pushed buyers to the sidelines.
• Tet and Lunar New Year holidays dampen demand in Vietnam: The Vietnamese market participants are more focused on procuring domestically produced HRCs at present. Higher prices of the imported HRCs and the upcoming Tet and Lunar New Year holidays to keep the market muted for about a fortnight are among the prime reasons.
• Rise in Covid cases and good bookings in the past keep Nepal muted: The demand from Nepal-based importers slowed down after having booked decent quantities in the past three weeks. Alongside this, the appetite for imported HRC also slowed down because of increasing concerns over rising COVID cases in the country.

Outlook: Indian mills seem to have enough time for making the next round of export bookings and hence are indicating high offers presently. However, buyers price idea is quite below currently and may take time to absorb the price hike.