Indian importers have become quite active owing to sharp decline in flat products prices in global market.
SteelMint has heard from its sources that neraly 1 lakh tonne of HRC has been booked from China to India in the range of USD 440-490/MT,CFR Mumbai for May deliveries.
Bookings have been made as landed cost of imports are cheaper compared to prevailing domestic prices.
Below is the cost comparison table of landed cost of imported HRC from China to India versus India’s domestic HRC prices.
|
Particulars |
Prices |
| Chinese HRC Prices,CFR Mumbai | USD 440/MT |
| CFR+BCD (@12.5%) | USD 495/MT |
| Safeguard Duty | Not applicable as CIF prices is greater than reference prices of USD 445/MT |
| Anti Dumping Duty | Not applicable as CIF prices is greater than reference prices of USD 489/MT |
| Port Handling | USD 20 |
| Miscellaneous expenses | USD 5 |
| Total in USD | 520 |
| Total in INR | 33,400/MT |
| Countervailing Duty@12.5% | 4,175/MT |
| Landed Cost of Imports | INR 37,575/MT |
| Ex-Mumbai(inclusive of Excise Duty 12.5%) |
INR 41,000/MT |
1 USD=64.3 INR
Source: SteelMint Research
However,currently HRC (ex-Mumbai) prices are hovering in the range of INR 40,000-41,000/MT inclusive of Excise duty of 12.5%. Hence,it can be figured out from the table that landed cost of imports are cheaper by INR 2,000-3,000/MT.
Another factor that has supported imports is appreciating Indian currency. Indian Rupee has appreciated to 64.28 against USD. A month back the exchange rate was around 65.4 against USD.
On the other hand, no fresh booking have been heard in the Indian export market as the Chinese HRC export offers remain more lucrative compared to that of India to Vietnam based importers.
Hence, cheaper imports, limited export order and dull domestic demand may push the Indian manufacturers to correct the domestic HRC prices in the near short term.
Indian flat steel exports up, imports down in FY17 :
As per recently released data by govt. of India, country’s flat steel exports jumped to 7.18 MnT in FY17 compared to 3.47 MnT in previous fiscal. On the other hand, Indian flat steel imports fell from 9.94 MnT in FY16 to 6.24 MnT in FY17.
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