Domestic HRC prices fell further this week owing to increased inventory by major steelmakers like SAIL and JSW Steel.
Current offers for 2.5 mm (IS2062) HRC is being assessed at INR 29,250/MT (ex-Mumbai) and INR 30,500 (ex-Delhi and ex-Chennai). All prices include excise of 12.5%.
Import HRC offers are going stable since last one month. Current offers for 2.5 mm HRC (grade SS400) from China is assessed at USD 270-275/MT and from Korea/Japan at USD 315/MT; prices are on CNF India basis.
After safeguard duty on HRC announced in Sep’15, government is likely to introduce another measure, minimum floor price (MFP) on steel imports.
Under this MFP system, although import offers plunge down further, all duties imposed to arrive at landed cost of imports (customs duty, countervailing duty etc) will be calculated on MIP.
Owing to MIP anticipation, there is no major buying interest for imports in Indian HRC market.
“We have stalled HRC purchases as of now as there are strong chances of MFP to be announced by next week. Also demand is likely to slightly pick up following surge in demand from automobile sector”; quoted one of the trader based in Chennai.
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