Cheaper imports and moderate
domestic demand is pressuring Indian producers of hot rolled coils to drop
their domestic base prices for November. But market sources reckon steelmakers
may be able to get away with simply rolling over prices from October’s levels,
chiefly because imported stocks that have so far arrived at Indian shores are
not competitively priced against domestic equivalents.
Offers from Indian mills for IS 2062 grade A/B structural HRC of 3mm and above
thickness averaged Rs 35,500-36,500/tonne ($ $727.6-747.9/t) ex-works last
month.
The imported stocks of
Chinese-origin 3mm-plus thickness SS400 commercial-grade HRC presently
available in India were booked at $720/t cfr. This is equivalent to a landed
price of about Rs 37,000/t ($758.1/t), including a 5% import tariff and an
exchange rate of about 1 USD = Rs 49 at the time of booking in mid-to-late
September.
“Steelmakers could try to carry
on with their existing prices for some more time,†a Mumbai-based trader
expects. Any “cheap†imports booked now would arrive only after another month
or so, some recent deals concluded at $640/t cfr for Chinese-origin SS400
commercial-grade HRC, but these coils would arrive only at the end of the year.
He added
Nevertheless, some Indian sources
believe domestic mills would drop their offers by up to Rs 1,000/t ($20.5/t) in
order to match the decline in the import offer prices. “Raw material pressures
are also cooling off, so mills may quietly offer some discounts,†another
Mumbai-based traders expects.
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