Indian mills lift rebar export offers on higher domestic prices, recovering futures

Indian rebar export offers witnessed a sharp rise this week. Although a few primary mills held back from quoting offers, others raised their offers sharply to $740/tonne (t) CFR Hong Kong on an actual weight (AW) basis, sources informed SteelMint.

SteelMint’s last assessment on 14 Jan’22 for BF-route rebar (B500B) stood at $715-720/t CFR Hong Kong on an actual weight (AW) basis. Considering this, Indian rebar export offers rose sharply by around $22/t, w-o-w and $35/t on a monthly basis.

Factors behind rise in offers

• Hike in Indian domestic rebar offers on cost push: Hike in domestic offers is a reason behind the hike in rebar export offers. Jindal Steel and Power Ltd (JSPL) has increased list prices of rebar (12-32mm) by INR 2,000/t ($27/t) for mid-Jan’22, sources informed SteelMint. The current price stands at INR 56,500-57,000/t delivered Mumbai, excluding GST at 18%. Improved demand from the construction sector and rise in coking coal prices resulted in the price hike, SteelMint notes. Coking coal prices from the key suppliers, Australia and USA, have risen by $25-40/tonne (t) w-o-w amidst strong global demand and supply disruptions. Prices for Australian premium low-volatile hard coking coal (HCC) have hit a record high of $430/t FOB Australia as of 19 Jan’22.
• Recovery in SHFE rebar futures: Recovery in SHFE rebar futures   supported rebar export offers. According to data maintained with SteelMint, the Chinese SHFE rebar futures contract for May’22 delivery closed at RMB 4,711/t ($743/t) on 21 Jan’22, witnessing an increase of RMB 47/t ($7/t), w-o-w.
• Higher global offers: Turkey-based mills are learned to have lifted rebar export offers this week by $10-15/t w-o-w on rising input costs and natural gas supply constraints impacting steel production.

Indian rebar exports surge y-o-y in CY’21

India recorded a surge in its rebar export shipments in CY’21. The volumes stood at 1.1 million tonnes (mn t) in CY’21, a sharp increase of 139% y-o-y as against 0.46 mn t in CY’20, as per customs data collated by SteelMint.