China’s HRC Export Offers to India Inch Up by USD 5/MT

HRC offers from China to India increases amid low inventories and rising iron ore and billet prices.

As per market sources, China-origin HRC export offers to India have moved up by USD 5/MT against last week. Current offers for 2.5 mm HRC are heard at USD 265-270/MT, FoB China and at USD 275-280/MT, CNF India.

The key driver behind the same is bullish sentiments in China’s domestic steel market. HRC prices in both eastern and northern regions of China have risen by 20 Yuan/MT (USD 3/MT) against last week following recent increment in raw materials (iron ore and billet) prices. China’s domestic billet prices have registered an increase of 40 Yuan (USD 6/MT) W-o-W basis.

The upward movement in HRC prices can also be contributed to Chinese government’s measures to control supply in order to curb steel mills’ overcapacity.

The increased offers are for API grade HRC as this grade steel is exempted from safeguard duty and does not have to adhere to Bureau of Indian Standards (BIS) norms.

Anticipation of Export Rebate Cut by China

This year China’s total steel exports have already crossed 100 MnT. Countries like US, European Union and India have imposed anti-dumping duty on various Chinese steel products.

In an effort to curb excessive exports Chinese government is likely to announce cut in export rebate policy for steel. Owing to this anticipation, traders in China are not much keen in exporting steel.

Inactivity in Indian Import Market

Indian market is abuzz with Minimum Import Price (MIP) anticipation on steel imports. Thus importers here have restricted their HRC/CRC bookings from overseas markets.

Also with BIS approval being made mandatory by Indian government, importers have cut down their commercial grade HRC booking from China as most of the Chinese mills do not have BIS certification.