SteelMint: Indian HRC export index falls $7/t w-o-w in recent deal

• SteelMint’s India HRC export index drops to $723/t FOB
• Export bookings of boron-added HRCs heard for Vietnam
• Vietnamese domestic mill Formosa cuts monthly HRC offers by $100/t

An Indian private steel major was heard to have booked 15,000 tonnes (t) of boron-added hot rolled coils (HRC) for export to Vietnam at $740-745/t CFR basis for July shipment. The deal was concluded in the previous week. However, with the steep price revision done by domestic mill Formosa, bids are likely to drop further.

SteelMint’s India HRC export index was recorded at $723/t FOB east coast, contrasted against $730/t FOB assessed a week ago, a fall of $7/t w-o-w.

Rationale: Thirteen indicative prices were considered as T2 inputs, while the export deal to Vietnam was considered as T1. The final price was an average of T1 and T2 inputs which stood at $723/t FOB. The CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.

Market-wise highlights

1. Limited buying interest in UAE weighs on offers: Indian mills were heard to be offering HRCs (boron-added) for export at $790-800/t CFR UAE against last week’s offers of $800-810/t CFR. Buyers anticipating further decline in offers were heard to be bidding at around $780/t CFR level. “We have not seen any buying interest in the market for the past few weeks; everyone is quiet,” said a reliable source from the UAE.

2. Vietnamese mill cuts HRC prices by $95-100/t for Aug, early-Sep sales: The Vietnamese integrated steel major, Formosa Ha Tinh, announced a steep drop in prices for August and early September sales today. Subsequent to the announcement, the offers for HRCs (SAE1006, skinpassed) stand at $755-765/t CIF Ho Chi Minh City (HCMC). It is likely that buyers will continue to purchase domestically before switching back to imported HRCs. This is going to weigh on imported HRC offers, informed a few market participants.

Furthermore, the inclusion of Vietnamese-origin hot-dipped galvanised products (HDG) in the country-specific quotas by European Union is likely to weigh on the demand.

3. EU buyers stay muted: European buyers are also sticking to the wait-and-watch mode anticipating further drop in offers from Indian steel producers in the market.

Other factors impacting buying interest include issues relating to opening of line of credits (LCs) and the high power tariffs.

Outlook
It is likely that HRC offers will remain under pressure on the global trade platform. The Chinese HRC (SS400) offers have dropped this week by about $25/t to $760/t FOB against last week’s $785/t FOB. After being lifted for a brief period, lockdowns were reinstated in a few major Chinese cities that showed a spike in daily cases.

Moreover, globally, buyers have moved to the sidelines, which is weighing on export offers from major exporting countries.