Indian HRC Prices Stable; Low Cost Import may Put Pressure

Indian Hot Rolled Coil (HRC) prices remain unchanged for this week. However, market participants anticipate correction amid low import cost.

HRC prices in domestic market trades at similar levels as compared to last week. Current prices for 2.5 mm HRC (IS 2062) are assessed at INR 33,500/MT (including Excise of 12.5%) in Mumbai and INR 34,000-34,500/MT (including Excise) in Delhi.

Market traders are quite bearish on current prices. Most of them feel that cheaper import of HRC from Japan, Korea and China will force Indian steelmakers to cut offers in August or September.

HRC offers for SS400 (Tube grade) from China have declined to USD 330/MT, CIF India for August shipments. Korean suppliers have also cut their offers to USD 370-375/MT and are willing to offer discounts on bulk booking of over 10,000 MT.

Landed Cost of Imported HRC Cheaper than Domestic HRC

Landed cost of imported HRC are trading at a discount of about INR 1,000/MT as compared to domestic HRC. Current offers for 2 mm prime quality material from Japan/Korea is being offered at INR 32,500/MT (including Excise) in Mumbai. Whereas, domestic mill are offering the same quality at INR 33,500/MT.

With global offers falling over USD 15-20/MT in July, market participants are expecting domestic prices to fall in same proportion in coming months.

“Domestic HRC prices may decline in September or October when low cost imported coil will start hitting Indian market. Offers for Japanese and Korean coils are in the range of INR 32,000-32,500/MT (including Excise) in Mumbai for July deliveries,” said a dealer based in Mumbai.

Prices including Excise 12.5%

Import Calculation

2 mm HRC from Korea; import duty @1.2%
USD 1 = INR 64
Source: SteelMint Research