Declining prices in global market have pulled down prices of imported HRC to India. Chinese HRC export offers have weakened by USD 5-10/MT W-o-W.
According to SteelMint analysis the landed cost of HRC from (China,Japan and South Korea) will stand at INR 38,000-38,700/MT. On the other hand domestic prices of HRC in flat steel market are hovering in the range of INR 40,000/MT (inclusive of Excise duty of 12.5%).
Therefore landed cost of HRC to India has become cheaper by INR 1500-1800 /MT as compared to domestic prices. Thus it can be anticipated that steel mills may cut down offers so as to compete with the cost-effective imports.
Below is the cost comparison table of landed cost of imported HRC from different origins to India versus India’s domestic prices.
| Landed cost of HRC imported from China,Japan,Korea to India | ||||
| Particulars | China | Japan | Korea | |
| CIF (USD/MT) | 450 | 510 | 505 | |
| BCD in % | 12.50% | 0.00% | 0.00% | |
| CIF+BCD (in USD ) | 506 | 510 | 505 | |
| Safeguard duty | Not applicable as CIF pricesis greater than reference prices of USD 445 | |||
| Anti Dumping Duty (As per recent recommendation by DGAD for definitive duty for HRC is at USD 489) |
Not applicable as CIF prices is greater than refrence prices of USD 489 | |||
| Port Handling (in USD) | $20 | $20 | $20 | |
| Miscellaneous expenses | $5 | $5 | $5 | |
| Total in USD | 531 | 535 | 530 | |
| Total in INR | 34,143 | 34,400 | 34,079 | |
| Countervailing Duty (12.5%) | 4,270 | 4,300 | 4,260 | |
| Landed Cost in INR | 38,413 | 38,700 | 38,339 | |
| Current Domestic HRC prices in India | ||||
| ExMumbai (inclusive of excise Duty 12.5%) |
40,000* |
|||
Prices on per Tonne basis
Considering 1 USD=64.3 INR
Source: SteelMint Research
Since imports have become cost effective compared to domestic HRC prices, resulting to surge in imports in near term. On the other side, Indian government has approved anti-dumping duty on HRC imported from China, Japan, Korea, Ukraine, Russia, Brazil and Indonesia for a period of five years. Thus the imposed protectionist measure will surely protect Indias’ domestic industry in the long run but in the short term its benefits seem limited.
HRC accounted for 41% share in India’s Flat Steel Imports in Q1 CY17 – India imported 1.37 MnT flat steel during Jan-Mar’17. Out of this, 0.56 MnT was HRC/Plates and 0.09 MnT was CRC. South Korea accounted for 31% share in imports followed by Japan at 27% and China at 23%
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