Falling imported HRC offers may force Indian manufacturers to cut prices for February deliveries.
Import offers for Hot Rolled Coil (HRC) from China to India have corrected by USD 10/MT this week owing to consistent slow demand and falling prices in Chinese domestic market. Current offers for commercial grade HRC are assessed at around USD 420-430/MT, CIF India, which was USD 435-440/MT last week.
Indian Domestic HRC Prices likely to correct
Indian HRC prices are likely to correct by at least INR 1,000/MT (USD 16/MT), according to market participants. Current prices for prime grade HRC of 2.5 mm are hovering in the range of around INR 38,500-39,500/MT (prices including excise and freight; VAT extra) across India.
“Demand is quite weak in the domestic market. There is a serious problem with liquidity and buyers are asking for more credit period. We expect prices should fall in February owing to cheaper imports from China & Russia”, said a pipe manufacturer based in Ludhiana (Punjab).
Another trader based in Delhi confirmed to have sold 2.5 mm HRC at INR 39,000/MT + VAT in small quantities.
Rising Imports lower Exports
Falling import offers is a matter of concern for Indian steel manufacturers. Above that, manufacturers are worried that strong Indian currency will support imports and will fetch them lower realizations for exports.
“There is a serious crisis for Indian steel manufacturers. Global buyers prefer Chinese and Russian cargo over Indian due to lower offers. Indian market is now limited to neighboring regions like Middle East, Bangaldesh and Sri Lanka. However, viewing at falling crude oil prices, we cannot expect demand from Middle East to be very strong. Indian manufacturers cannot afford to cut prices beyond one level”, said an industry expert.
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