China will scrap the 9% export tax rebates for hot rolled coil (HRC) on Jul 15, 2010, which seems to have no obvious influence on the HRC import markets in Southeast Asia and India. Currently, the Asian buyers are still playing waiting games, placing nearly no new orders.
The said situation comes as a result of three factors.
Firstly, HRC inventories remain large in India and Vietnam. Presently, commercial HRC stocks are estimated at more than one million tonnes in India’s domestic market, with additional 500,000 tonnes to arrive before Jul 15. The problem of high stocks is expected to be eased at the end of August. In Vietnam, the steel firms have already cut steel prices for many times under weak demand and large imports.
Secondly, it is rainy season now both in Vietnam and India. At last, most HRC importers have postponed purchases on uncertain market trend, believing that the Indian steel market will keep sluggish in the coming two or three months.　
The traders in Vietnam said they had not ordered HRC for two weeks. Chinese exports are offering 2mmSAE1006 HRC at US$650/tonne (CFR) at the lowest, while the buyers expect a price level of US$600-620/tonne (CFR). The prices are around US$630-640/tonne in the local market.
Although China’s cancellation of HRC export tax rebates is believed to ease the pressures of low-cost imports, the Indian market has yet to be stimulated. The steel mills there are striving to maintain the July EXW prices so as to support the market prices, but the distributors and traders look forward that the steel mills will offer some preferential policies in mid-July if the market continues to be slack
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