Domestic HRC prices have dipped by INR 750-1,000/MT (USD 12-15/MT) over last week in the wake of stock clearance before Diwali holidays.
Market sources informed SteelMint that HRC prices in domestic retail market have fallen as traders want to clear off their inventories before India’s biggest festival, Diwali.
“Market won’t work in its full capacity next week due to Diwali and fall in prices is just a temporary phase before the festival. Prices will stablize post holiday week”, quoted a market participant based in Mumbai.
Meanwhile, Indian mills haven’t announced any cut in HRC prices yet.
Current offers for 2.5 mm HRC (grade IS2062) are being assessed at INR 31,000-31,500/MT (ex-Mumbai), INR 32,500-33,000/MT (ex-Delhi) and INR 32,500-33,000/MT (ex-Chennai and Kolkata). All prices include 12.5% excise.
Demand for rollback of safeguard duty
Japan and Korea have many companies based in India, catering to various sectors including automobile where steel is key raw material. With safeguard duty imposition, steel imports from parent companies have become costlier. Thus, Korea based POSCO (cold rolling plant is located in Maharashtra) and Japanese companies like Suzuki, Toyota, and Honda, have written to DG Safeguards (DGS) requesting rollback of safeguard duty on hot rolled products.
India has signed FTA (Free Trade Agreement) with Japan and Korea in 2010 and 2011 respectively for eight years where import duty imposed on imports from both these countries are almost negligible (1% and 0.85% respectively).
Now after 20% provisional safeguard duty, Indian government has to justify its point to both the countries as FTA was signed assuming domestic demand in India will grow accordingly, which has not happened yet.
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