Indian HRC export index reported a significant increase of around by $14/t on weekly basis. Currently, SteelMint HRC (SAE 1006)index stands at a $752/t FoB basis which was at $738/t FoB basis last week.
Indian mills have raised HRC export offers to UAE at around $770-780/t CFR after the Chinese steel mills raised offer last week on discussions over export rebate cut to 8% from 13%. Last week Indian mills were offering around $750-760/t CFR basis.
“Market remains largely mute and buying remain limited. Trade activities are expected to improve post Chinese Lunar New Year holidays. Buyers are in waiting mode. However, UAE based importers may book some material on prompt requirement,” shared an Indian HRC exporter to SteelMint
Meanwhile, Vietnam is closed due to Tet holiday. Indian mills were offering HRC to Vietnam at around $760-770/t CFR Vietnam. After holidays trade activities are expected to pick up in Vietnam and China.
Due to subdued domestic demand Indian mills may raise HRC exports allocations in mid Feb or March for April shipments.
Rationale:
Five indicative prices were considered as T2 inputs, with an average price of $752/t. The final price was an average of T2 inputs due to the absence of confirmed trades (T1). The CFR prices were converted to FoB equivalent by deducting freight costs from the buyer/seller.
Global HRC market overview
1.China HRC export market remained mute on upcoming holidays-
Chinese steel mills have stopped issuing offers for HRC exports since trade participants have made early exit from the market amid Lunar New Year holidays scheduled from 11th Feb onwards. Also, with limited time the issue of Line of Credit (LC) was also not feasible which kept the Chinese market muted.
Previous week offers were heard in the range of $640-650/t FoB China basis. Concerns over possible export rebate cut too have prompted mills to increase their offers in the previous week.
2.CIS origin HRC offers decline further-
CIS origin HRC offers declined to $690-715/t from $695-725/t FoB Black Sea basis on the back of falling global prices. Demand from major importing nations continued to remain low further weighing on the offers.
3.Vietnamese buyers exit market for Tet holidays-
The Vietnamese imported HRC market turned mute beginning this week with Tet holidays keeping market activities to a bare minimum. Chinese tier 2 mills continued to offer high at $670-690/t CFR Vietnam, up from $655/t CFR basis a week back. However, tier 1 Chinese mills are also offering at $710/t on anticipated export rebate cuts. Japanese and South Korean mills are offering at $760-770/t CFR basis, down from the previous week offers at $770-780/t CFR basis.
4.Pakistan imported HRC prices up by $30/t from China-
Chinese mills have raised their offers by $30/t this week and are offering at $690/t CFR Pakistan. Last week the offer stood at $650/t CFR basis. Meanwhile Taiwan is offering HRC to Pakistan at $755/t CFR basis.
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