The Indian HRC export index fell by around $2/tonne (t) this week as most of the mills withheld offers due to the steep fall in global market prices. SteelMint’s Indian HRC export index stands at $875/t FOB east coast.
Mills continued to observe the market amid a lack of clarity in the price direction, a sharp decline in Chinese offers and higher realisations in the domestic trade segment. As per the previous week’s assessment, trade reference prices of SteelMint’s benchmark HRC (SAE 1006, 2.5-8mm) stood at around INR 71,000-72,000/t exy-Mumbai ($958-971).
Meanwhile, there is low buying appetite in the overseas markets as buyers turn observant in expectation of a further decline in offers.
Previous offers to Vietnam and the UAE were at around $910-920/t CFR basis. Meanwhile, last offers to Nepal were heard at $875-885/t ex-plant (translating into $895-905/t CFR Raxaul border).
Rationale: Eight indicative prices were considered as T2 inputs while no major export deals were reported as T1. The final price was an average of T1 and T2 inputs which stood at $875/t FOB. The CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.
Global HRC market overview
1. Chinese HRC export offers decline further: HRC export offers from China dipped by around $70/t to $810-820/t FOB China as the government intensified its attempt to curb thermal and coking coal price manipulation in the country. Meanwhile, the lack of clarity on the export tax levy continued to weigh on buying preference for Chinese-origin HRCs.
2. Imported HRC prices in Vietnam under pressure from Chinese mills: The Chinese mills dropped their offers significantly by $60/t for the Vietnamese market this week. The prices have turned competitive against rival offers. However, Vietnamese buyers are awaiting price announcement for Jan’22 shipments from domestic steel majors.
Meanwhile, a small parcel of 5,000-10,000 t of Indonesian-origin HRCs (SAE 1006) was heard booked at $810/t CFR for Jan’22 shipment. However, it could not be confirmed till the time of publishing this article.
A few trade sources highlighted offers for Chinese HRCs at $765/t CFR Vietnam but for Apr’22 shipments while Indian and Russian mills delayed quoting offers for the Vietnamese market. Also, a few Vietnam-based traders highlighted position cargo being offered at $840/t CFR.
3. Imported HRC offers to Pakistan dip by $80/t w-o-w: The Chinese mills took a major correction of $80/t in their offers to Pakistan this week.
Chinese HRC (SS400) offers stands around $830-850/t CFR Pakistan as against $910-920/t CFR basis a week back. However, no offers were heard from Taiwan, Japan, Brazil, Kazakhstan and South Korea during the week.
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