The appreciation of Indian rupee has not seen any major buying interests from importers of flat steel products. This appreciation has bought some import feasibility, however the dry demand in the economy has not seen any strong buying interests from Importers.
Many believe that the market will remain subdued due to less buying interests from consumers. The upcoming election is creating wave of uncertainties for the industry which is still struggling. As per our interaction with few market participants based in Mumbai, the level of optimism has not been restored in the market till now.
[su_quote cite=”An Importer based in Mumbai”]We haven’t booked any orders as of now. We are only considering specific orders for a minimum booking of 300 MT.[/su_quote]
Currently, Indian HRC prices are hovering at around USD 540-550/MT. HRC offers from China have corrected as FOB prices in China has declined by USD 5/MT this week. Buyers are reluctant to place any fresh orders due to low demand in the market. Another importer based in Mumbai too showed no signs of optimism either. Reacting to the questions posed by SteelMint, he said:
[su_quote]Rupee appreciation has given some relief to us; however domestic demand has not seen any major revival. Imports will only pick up if there is a strong recovery of demand in the market. We are currently importing only CRC. [/su_quote]
A comparison of import prices and currency levels in the past 3 months is as shown under:
Concerns for Indian Exporters ahead
Weaker INR and poor demand in the domestic market encouraged many Indian manufacturers to sell their products in overseas markets; however the changing currency dynamics might bring in some concern for the exporters of flat products. Improving feasibility of imports will put pressure on domestic prices as well.
Some manufacturers have been exporting flat steel to European countries, but CFR offers for HRC & CRC in Western Europe have fallen by USD 8-13/MT in last few trading sessions. This will also put pressure on export margins of Indian exporters. Market experts also view that Chinese Yuan is trading at 13-month low and this may hurt Indian export offers as Chinese export realization will go up with depreciating Yuan.
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