- HRC export index rises to $583/t FOB
- Hike in Chinese prices, supply constraints push offers higher
- No deals heard at current offers
- Limited activity in Europe amid holidays
SteelMint’s India HRC (SAE1006, boron-added) export index increased this week by $18/t to $583/t FOB east coast.
It can be recalled that the mills had curtailed production in July to counter slow demand and declining prices. This scenario is likely to continue in August, and thus mills have started offering on the higher side, sources informed SteelMint.
However, lower appetite for boron-added HRC and competitive offers from Chinese mills still remain the major bone of contention for Indian mills.
Chinese domestic HRC prices increased by RMB 40/t to RMB 4,030/t today against RMB 3,990/t assessed on 5 August. Prices are on an ex-Tianjin basis, inclusive of VAT at 13%. Also, Chinese HRC SHFE futures (October contract) increased by RMB 81/t to RMB 4,071/t in today’s closing, against RMB 3,990/t on 5 August. This lent some support to Chinese HRC export offers which, in turn, nudged Indian mills to raise their offers.
Rationale: Twelve indicative prices were considered as T2 inputs, while there was no export deal reported to Vietnam or the UAE to be considered as T1. The final price was an average of T1 and T2 inputs which stood at $583/t FOB. The CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.
Market-wise highlights-
1. Inactive Middle East market amid Muharram: The Middle East market stayed mute during the Muharram (8-9 August) holidays. Indian mills have started offering slightly higher at $630-640/t CFR UAE after a recently-reported deal at $620-630/t CFR.
2. Vietnamese buyers waiting for domestic prices: Indications from Indian mills to Vietnam increased this week by $30/t to $620-630/t CFR. However, buying remains low. Buyers are expecting domestic producers, Formosa Ha Tinh and Hoa Phat, to announce prices for October and early-November in the coming week. Thus there is not much interest for imported HRC at present.
However, a small parcel of 5,000t Chinese HRC (SS400) was heard booked at $610-618/t CFR last week. Delivery is expected in September. However, this deal could not be confimed till the time of publishing this article.
Fresh indications for Chinese HRC (SS400) are at around $620/t CFR, while those for SAE1006 are at $625-630/t CFR, sources informed SteelMint. Meanwhile, Chinese mills too have been curtailing their output majorly to adhere to carbon emissions reduction norms.
3. Limited activity in European market: The European market remains largely inactive with most of the buyers on holidays. Thus, most of the Indian mills are not quoting actively in this market. Nonetheless, a few indications are being heard at around $690-700/t CFR.
4. Mills raise offers for Nepal: A private Indian major is heard to have been offering HRC at INR 55,000/t (equivalent to $691/t) CFR Raxual Border this week. This is higher by around INR 2,500/t from last week’s offer of INR 52,500/t. No deals have been heard concluded at current indications, sources informed.
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