Domestic steel players’ move to clear off inventory before the end of fiscal year FY16 and influx of cheap imports lead to oversupply of CRC in domestic market.
While Indian HRC prices registered a fall of INR500/MT this week, CRC market crashed down with prices falling in the range of INR 2,000-2,500/MT over last week.
Current offers for 0.9 mm CRC is being assessed at INR 33,000/MT (ex-Mumbai), INR 33,500/MT (Ex-Delhi), INR 33,500 (ex-Kolkata), and INR 35,000/MT (ex-Delhi). All prices include excise of 12.5%.
This price plunge can be attributed to excessive supply of CRC by domestic players such as SAIL, JSW Steel, and Bhushan Steel. In a recent investors conference call, SAIL mentioned that the company expects to sell 8 MnT of flat steel in remaining five months of fiscal year FY16 as its target is 14 MnT for entire fiscal.
Other steel majors like JSW and Bhushan Steel are also supplying more CRC in the market as they need to clear off their inventory before fiscal year FY16 ends.
However imported CRC offers from China and Korea have remained stable with minor fluctuations since last three weeks owing to sluggish demand and stability in global market.
Imported CRC (0.9 mm) offers from China are assessed in the range of USD 310/MT while offers from Korea/Japan are at USD 380/MT. All prices are on CNF India basis.
Safeguard duty on CRC
Post safeguard duty on HRC announced in September, importers in India started importing steel in the form of CRC, pipes/tubes. This led to influx of CRC imports in India.
As per provisional customs data, CRC imports registered an increase of about 14% in Nov’15 against Oct’15. The same is recorded at 1,65,569 MT in Nov’15 which was 1,45,358 MT in Oct’15.
Thus as per media reports, Steel Secretary of India has confirmed that in order to protect the domestic steel industry, safeguard duty imposed on HRC is likely to be extended to other steel products of value chain which also include CRC.
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