SteelMint: Indian HRC export index inches down on bid-offer disparities

• Deals concluded to Turkey, Middle East and Europe in previous week
• Demand turns slow in Vietnam, due to preference for domestic purchases
• Less chances of any sharp price hike in export offers in near term

The Indian hot rolled coils (HRC) export market turned less active after witnessing fewer bookings for Turkey, Middle East and Europe for April shipments in the past week. However, in Vietnam, demand for imported HRCs was fairly low as buyers were procuring locally amidst price competitiveness.

The deals were closed at price levels lower than those achieved in the prior bookings which weighed on the HRC export index. SteelMint’s India HRC (SAE1006) export index edged down to $864/t FOB east coast as compared to $867/t FOB a week back.

Region-wise market update

• Mills active in exploring Europe and Middle East: Indian steel makers are exploring overseas markets such as the European Union (EU) and Middle East as demand in the domestic market continues to remain low. Some deals were heard in the past 8-10 days.

a) A volume of 20,000 t of HRCs was booked at $905/t CFR UAE.
b) A deal happened towards the end of the previous week at $965-967/t CFR Europe. However, the deal quantity could not be confirmed till the time of publishing this report.

The current week’s indications are at $900-910/t CFR Middle East, down from the previous firm offers of $920-940/t CFR a couple of weeks ago.

• Indian mill seals 20,000 t HRC export deal for Turkey: A major private Indian mill has booked around 20,000 t of HRCs for exports to Turkey towards the begining of the previous week. The deal was sealed at $910/t on CFR basis for April shipments. In Apr’21-Jan’22, Indian mills have exported around 0.62 mnt of HRCs to Turkey, accounting for around 12% of the total volume.
• Low demand for imported HRCs in Vietnam, mills hold offers: Competitive prices of locally manufactured HRCs (SAE1006, skinpass) ranged between $828-845/t CFR which continued to attract Vietnamese buyers. It is highly likely that the market might wait for the domestic supplies to dry up before shifting interest towards imported HRCs. No firm offers were rolled out by Indian mills this week. However, indictions were at $890-900/t CFR Vietnam.
• Deals for end-April shipments close for Nepal: As far as the Nepal market is concerned, a couple of deals aggregating to 7 rakes were closed at $855-860/t CFR Raxaul border (equivalent to $835-840/t ex-plant) for end-April despatches. Furthermore, current indications are heard at $870-875/t CFR Raxual border ($850-855/t ex-plant).

Outlook

Industry insiders indicated that global HRC prices are likely to have peaked and there is less scope of any significant hike from the current levels, amidst drop in global iron ore prices and lower bids from importing nations.

Offers from major exporting nations like China and Japan have remained stable too. Chinese steel futures have also remained range-bound in the past one week and SHFE May’21 contract closed at RMB 4,850/t today. HRC price indications from Japanese mills also remained unchanged this week.

On the other hand, escalating trade tension between Russia and Ukraine is a matter of concern that may impact global HRC supplies.

On the domestic front, major steel mills were expected to take a second price hike last week but which is still pending, SteelMint notes. Thus, mills have also held back from offering in the overseas markets.