Domestic CRC prices have plunged down amid increased imports of cheap CRC, especially from China.
Sluggish demand is not only hurting HRC prices but also CRC offers. Prices in domestic market have dipped by INR 500/MT over SteelMInt last week’s price assessment.
Current offers for 0.9 mm CRC are assessed at INR 36,000/MT ex-Mumbai, INR 37,500/MT ex-Delhi, INR 37,000/MT ex-Chennai and Kolkata. All prices include 12.5% excise.
Imported offers from China decreased sharply by USD 10/MT. While, no fresh offers are being heard from CIS countries. CRC (0.9 mm) offers from China are assessed in the range of USD 320-325/MT, CNF India.
Anticipation of safeguard duty on CRC
Post safeguard duty on HRC, buyers have become more inclined toward CRC imports. As per SteelMint study, CRC imports registered a rise of about 42% in Oct’15 against Sept’15. The same is recorded at 1,45,358 MT in Oct’15, which was 83,872 MT in Sept’15, according to provisional data based on customs records.
It is heard that many CRC manufacturers are lobbying hard with government to extend safeguard duty on other steel products of value chain.
POSCO-India’s move to offset safeguard duty
As per market sources, in a move to offset the safeguard duty, POSCO-India is importing HRC in its India based plant and processing it further to CRC. This CRC is then exported to foreign markets using advance license.
An advance license is issued under Duty Exemption Scheme of India’s EXIM policy, which allows duty-free import of any input for goods production meant for export purpose.
As per trade sources, POSCO-India is offering its CRC (0.9 mm) at USD 350/MT, FoB India while its offers for Southeast Asia are heard in the range of USD 375-380/MT, CNF.
In public hearing conducted on 16 Nov’15, POSCO-India has made its representation to DG Safeguards as affected party demanding removal of safeguard duty on hot rolled products.
It argued that duty on HRC is hampering its business in India as HRC imported from Korea is for captive use and not for domestic sale that could have an impact on the domestic steel companies.
It also contented that out of India’s total steel imports during May-Sep’14. POSCO alone imported 9.5 MnT, accounting to 30% of India’s total steel imports. If this is excluded, there is no surge in imports.
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