The global uptrend and the possible export tax rebar cut in China are expected to rapidly push prices up further in April. Sources have told SteelOrbis that they expect a hike of up to $100/mt during the month.
Last week, deals for SAE1006 HRC from India to Vietnam were done at $840-845/mt CFR, as SteelOrbis reported earlier, up by $35-40/mt from the previous price level. The tradable price level in Vietnam may reach as high as $950/mt CFR in April, while prices to other Southeast Asian re-rollers could reach up to $1,000/mt CFR, market sources told SteelOrbis. “As Indian mills are almost alone here [in Vietnam] now, they will target higher prices,” a trader said. In the next round of offers, Indian producers will aim for not less than $870/mt CFR. Some exporters had already voiced offers at this level late last week.
Indian mills have managed to increase prices significantly in HRC sales to Europe, seeing tight supply there and surging local quotations. The latest deal from India to Europe has been confirmed at $990/mt CFR, which translates to $940-945/mt FOB, up by a huge $60-70/mt compared to the previous week. New offers to Europe from India are at $1,000/mt CFR and above. Sources said that, taking into account the widening gap between prices to Europe and to Asia, Indian producers will try to increase prices more to the latter.
One of the main reasons for the sharp price increase in Southeast Asia is the expected export tax rebate cut for HRC in China from 13 percent to zero from April 10. “This will be a key positive for Indian steel mills to deepen their footprint further in key Asian markets like Vietnam, as buyers will continue to have fewer options of sellers in the market,” a source from India said. If the full 13 percent rebate is lifted, the Chinese producers will lose $100/mt and will ask at above $900/mt CFR in the export market, sources believe.
Offers from Japanese HRC suppliers to other Southeast Asian countries like Indonesia and Thailand were at $910-920/mt CFR last week and some small volumes have already been sold to regular customers at these levels. HRC suppliers from Taiwan are targeting $900-920/mt CFR in Southeast Asia.