China’s HRC offers to India have remained stable for second week as trading activities in the country have stalled ahead of Chinese New Year holidays from 7 to 13 Feb.
Current offers for 2.5mm HRC is being assessed at 275-280/MT, FoB China and at USD 295-300/MT, CNF India. While offers from Korea, Japan and CIS region are also stable at USD 315/MT from Korea, USD 300/MT from Japan and USD 310/MT from CIS region, CNF India.
As per market sources, trading activities have become sparse since last week itself and both domestic and offshore buyers will return post holiday. In China’s domestic market commercial-grade HRC is being traded at RMB 2,020-2,050/MT (USD 307-311/MT; prices include VAT of 17%), up by USD 2-3/MT against last week.
As reported, CISA (China Iron & Steel Association) members’ crude steel production stood at 15.13 MnT in mid Jan’16 which is 3.50% down than the production in early Jan’16 and 9.2% down than the crude steel production in late Dec’15. This indicates that Chinese government is now taking stringent measures to curb steel oversupply in the market.
Medium and large sized mills which are member of CISA have incurred a total loss of USD 9.8 billion in the year 2015 while they made profits of USD 3.41 MnT in first half of 2015.
Uncertainty in Indian Steel Circuit
As per market sources, Indian importers are currently not interested in booking steel import owing to BIS license being made mandatory from 18 Mar’16. Also there are rumors in Indian steel circuit that government is likely to impose safeguard duty on all the steel products and also import duty on steel products will be increased up to 25% from current rate of 12%.
“There are rumors everywhere and market participants are uncertain about future measures likely to be taken by the government to protect the domestic steel industry from cheaper imports. And also because of sluggish domestic demand there are not much bookings being made by Indian buyers”; quoted a trader based in Mumbai.
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