SteelMint’s India HRC (SAE1006) export index dropped further by $23/tonne (t) to $750/t FOB east coast, as buying interest in the overseas market continues to remain low with the approaching Christmas and New year holidays turning buyers less active.
Offers heard for the Vietnamese market were around $770-790/t CFR, lower by $10-20/t w-o-w. However, indications were around $780/t CFR for the Middle East region.
Rationale: Thirteen indicative prices were considered as T2 inputs, while no export deals were reported as T1. The final price was an average of T1 and T2 inputs which stood at $750/t FOB. The CFR prices were converted to FOB equivalent by deducting freight costs from the buyer/seller.
- Vietnamese mills cut prices, buyers continue preferring domestic HRC:
Vietnamese steel majors have reduced their prices for Feb’22 dispatches up to $58/t considering the slow pace of demand recovery and decline in global HRC prices over the past couple of months.Where Formosa is offering HRC (SAE1006, Skinpasses) at $825/t CIF, Hoa Phat is offering at $795-800/t CIF (down, $35-40/t) for Feb’22 delivery. This has kept the buying interest inclined towards domestically produced HRCs. Meanwhile, the import bookings of HRCs too are slow due to the reduced demand for value-added products that Vietnam exports to EU countries and USA.
- Opening of LCs an issue amid upcoming holidays
Besides the consistently slow interest from overseas buyers, participants will be facing issues around the opening of letters of credit (LC) from banks at short notices at present. - Mills explore export options for Saudi Arabia
Market participants highlighted a deal of 15,000 t of Indian-origin HRCs to have concluded to Saudi Arabia at around $780-790/t CFR. However, it cannot be confirmed till the time of publishing the report. A few unconfirmed reports also indicated deals to have concluded for Iran. However, no sell-side confirmation was received on this.
Outlook
With global iron ore prices firming up on restocking needs and recovery in SHFE futures, Indian mills are expecting lesser price correction in the short term. Prices of Chinese spot iron ore fines Fe 62% closed at $123/t CNF China on 20 Dec’21, increasing w-o-w by $13/t, on restocking needs, as per data maintained by SteelMint.
SHFE HRC May’22 futures contract settled at RMB 4,615/t today, up by RMB 75 w-o-w.
Also, Vietnam-based mills, keeping away from imports for quite some time, may see some bookings before the Tet holidays towards end-Jan – early-Feb’22.
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