India: HRC Traders offer Discount of INR 500-700/MT

Flat Steel traders are offering discount of INR 500-700/MT for HRC to clear off stocks on apprehension of further price correction this month. Last month traders offered a discount between INR 500-1000/MT for specific grades and thickness. Traders believe that Flat Steel prices in January are expected to be under pressure due to slowdown in sales.

Last week, minor improvement in Ruble led to stability in offers from Russia. Offers from Russia are hovering in the range of around USD 470-475/MT, CIF India.  Meanwhile, Imported HRC of Chinese origin is offered at USD 470/MT, CIF India. Some market participants view that the removal of export tax rebate by the Chinese government will have minimal impact on HRC offers.

Indian HRC export offers to Middle East are in the range of USD 470-475/MT, FoB India. Domestic HRC prices have corrected by 6-7% within a short span and this trend is likely to continue for a brief period.

A local trader in North India stated, “We expect manufacturers to give a discount of another INR 700-1,000/MT this month. Although, no official announcements had been made so far, this price cut is expected to be given as discount at the end of this trading month based on lifting volumes. Currently, HRC 3.0 mm is offered at INR 40,000/MT in Ludhiana. ”

Tube grade HR products was offered at INR 36,600/MT in Tatanagar whereas IS 2062 grade traded at INR 37,600/MT.

Similarly, trading activities in South markets also remain subdued in absence of demand. Prime HRC in Bellary was auctioned at around INR 40,000-41,000/MT. One of the trade sources here said that,

“Auction price of HRC have increased by INR 500/MT as compared to previous week. This may be a positive trigger for manufacturer who may possibly think for a price hike next month. But its too early to say this, as manufacturers are closely watching for the stability in exchange rate and import volumes.”

Chinese export tax rebate controversy

Some Boron added Steel shipments of Chinese exporters which were expected to be delivered by 31st December 2014 and were not dispatched from the ports will not get the tax rebates. Mills which have ordered these materials before 31st December 2014 are claiming for the rebate, whereas exporters are unable to give the benefits for these consignments.