SteelMint: Indian HRC export index spikes by $67/t w-o-w as mills lift Apr offers

• Mills raise HRC export offers, eye Apr’22 shipments now
• HRC export bookings estimated at around 1 mnt for Feb-Mar’22 shipments

The Indian steel giants pushed the offers higher for major export destinations such as the Middle East, Turkey and Europe this week, except to Vietnam. However, no deals were reported in the past few days.

SteelMint’s India HRC (SAE1006) export index rose to $867/t FOB east coast, up by $67/t w-o-w. Furthermore, Indian mills are decently booked for the months of February and March with estimated export bookings of 0.55 million tonnes (mnt) and 0.59 mnt respectively.

Rationale: Nine indicative prices were considered as T2 inputs, while there were no export deal to be considered as T1. The final price was an average of T1 and T2 inputs which stood at $867/t FOB. The CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.

Region-wise market update

• Offers to Turkey up by $40/t against previous deal: Indian mills are offering around $910-920/t CFR Turkey, up by a significant $30-40/t against the previous deal reported at $870-890/t CFR for early March delivery.
• Moderate recovery set to continue in 2022 in EU-Eurofer: Steel consumption in Europe is set to grow by 3.2% in CY’22. However, global supply chain issues and soaring energy prices are projected to impact demand, forecasts Eurofer. Indian HRC export offers to Europe have now risen to $940-945/t CFR from $900-910/t CFR a week back.
• Middle East import offers up: Offer levels were heard at $900-920/t CFR for the UAE market, up by a massive $60-70/t contrasted against $840-850/t CFR a week back. Buying remains slow in the market for imported HRCs from India owing to decent bookings in the previous month.
• No firm offers for Vietnam: The Vietnamese market is gradually resuming after the Tet holidays observed in the previous week. Indian mills are biding their time before opening up with offers because of limited appetite for exports. They also expect further increase in export offers from other countries. Chinese mills were heard to be offering HRCs (SS400) at $820/t CFR Vietnam, up from the pre-holiday levels of $800-810/t CFR. However, no firm bids were heard.
• Offers to Nepal spike by $45/t w-o-w: Offers for the Nepal market are being heard around $915-920/t CFR Raxual Border, up by $40-45/t against the previous week offers of $870-880/t CFR. Buying interest continues to remain limited on lower appetite for imported HRCs.

Outlook
Global HRC prices are expected to remain strong for April shipments. Japan’s Nippon Steel Corporation (NSC) has raised its hot rolled coil (HRC) prices for April shipment by another $50-100/t over its February prices, SteelMint learnt from sources. This is NSC’s hike for the second consecutive month, taking the increase to over $200/t. Post-hike, Nippon Steel will supply HRCs to Southeast Asia at $900-950/t and to other regions like Southwest Asia, Middle East and Europe at $1,000/t or higher.

Also, USA has announced that it would partially lift the 25% tariffs on steel imports from Japan imposed by the erstwhile Donald Trump administration on national security reasons. However, the tariffs on aluminum imports will remain unchanged, according to latest reports by the Japan Broadcasting Association. This may lift Japanese steel exports to USA, and other players like India may turn active to fill the gap in the markets where Japan was seen actively exporting steel.