Chinese Imported HRC Offers Fall Further Post Safeguard Duty

Even 20% provisional safeguard duty is unlikely to protect domestic steel industry because of falling export offers from China and Russia.

Indian government’s move to impose 20% safeguard duty on hot rolled products to counter the problem of increased cheap imports received mixed reactions from domestic steel players.

While steel giants like JSW Steel, TATA Steel, and SAIL have welcomed this move, end users (CRC manufacturers) like Uttam Galva and POSCO, India are showing their agitation against the same as their input cost is likely to shoot up.

It is anticipated that domestic players are likely to increase their HRC prices marginally by INR 500/MT. However, in counter attack, exporters from foreign countries have further lowered their offers after safeguard duty announcement.

Current offers for 2.5 mm HRC is assessed in the range of USD 290-295/MT (-USD 10/MT) from China and at USD 305-310/MT from Black Sea (-USD 5/MT). However, no fresh offers are being made from Japan and Korea and the same is being last offered at USD 350-355/MT. All prices are at CNF India basis. Export offers from India is assessed at USD 350, FOB India basis.

Looking at the current scenario, there is little scope for Indian manufacturers to increase their prices. If offers from China and Russia continue to fall further in the same trend 20% safeguard duty will not be sufficient to protect the already pressurized Indian steel industry.

[su_note note_color=”#c2d6e9″ text_color=”#0b0a0a”]The end user, POSCO-India has written to DG Safeguards (DGS) to reconsider imposition of safeguard duty since the notification on initiating investigations in to imports have mentioned that any interested party can submit a request to DGS within next 15 days. Bombay Iron Merchants Association (BIMA), Cold-Rolled Steel Manufacturers’ Association (CORSMA), Steel Wire Manufacturers Association of India (SWMAI) and Steel Chamber of India are the industry bodies representing the end user segments that are showing their agitation against safeguard duty.[/su_note]