There was a sense of optimism seen from the importers community as Chinese HRC prices corrected and Indian currency exchange retraced back to sixty levels. Market expected that imports of Flat products to pick up due to this. But, owing to dull demand prevailing in the economy, there was no sign of imports to pick up either. Some manufacturers adjusted their prices accordingly in order to prevent import of cheaper materials.
The demand scenario in India has not been able to lift up sentiments for the importers & traders. Although, there is an improving feasibility towards imports, traders are not willing to book any bulk orders as of now owing to a lackluster demand in the domestic market.
SteelMint assessed the ground reality by interacting with some importers & traders in Mumbai. One of the importers quipped,
The current situation of demand is extremely critical and it is difficult to predict what more surprises are lined up in future for the Flat steel industry.
Upset with the defunct policies framed by the government and the policy logjams, the importer said,
Since project activities in both public and private sectors have slowed down significantly, import orders have also been affected. The risk of booking orders now is quite high as demand has already drowned from the market.
Dip in Trading Volumes prevented Imports
Traders have seen a sharp dip in trading volumes, which have affected their margins significantly. One of importers who imported Hot Rolled Coils and plates used in boilers commented,
The power sector has also seen some of the worst time in past ten years. We are not having any new project order for boiler plates. There is minor demand from plants only for maintenance works. Normally, we traded 150 TPD but now hitting the 100 TPD target seems to be a herculean task. Currently, our trading volume in a day is around 80-90 TPD.
Deteriorating Chinese HRC Prices
Meanwhile, Chinese HRC prices have corrected by around USD 5/MT in the past week owing to weaker domestic demand in the economy. Currently, HR Coils in China are trading at USD 517-520 /MT FoB China. Import prices from China are around USD 550-555/MT CFR Mumbai, whereas offers from Korea & Japan traded at slight premium. HR Coil offers from Korea are at around USD 575-580/MT and from Japan it is hovering in the range of USD 585-590/MT, said an Importer.
Scanning the Export Market
While talking to one of the officials of Asian Ispat FZ LLC in UAE, SteelMint learned that there is good demand for downstream products like CR Coils and Galvanized products in UAE market. Interacting over the phone from UAE, the official said,
We are seeing a good demand for our Galvanized products here. Currently, we are supplying around 10,000 MT of Galvanized products for UAE market.
Market sources in UAE say that, out of total 30,000 MT of Galvanized products traded in this market, Al Ghurair Iron & Steel, one of the competitors of Asian Ispat produces around 20,000 MT of Galvanized steel products of which 10,000 MT is for the domestic market and the remaining 10,000 MT is exported to other countries. As per our sources based in UAE, Galvanized iron products are trading at USD 800-850/MT CFR UAE.
The volume of exports from India to UAE has been reduced in the recent past. Market participants speculate that since Romania & Ukraine are also exporting to UAE, this might have put pressure on the volumes for Indian manufacturers.
Leave a Reply