Indian Flat Products Prices Stable Ahead of MIP Expiry

Domestic flat steel prices have remained stable this week amid uncertainty about MIP.

Current offers for 2.5mm HRC (IS2062) are being heard at INR 33,500-34,000 (ex-Delhi) and INR 34,000 (ex-Mumbai).

0.9mm CRC (IS 513, Gr.o) offers are heard at INR 38,000 (ex-Mumbai) and INR 39,000/MT (ex-Delhi). Prices include excise of 12.5%.

Current offers for base size commercial grade plates are being assessed at INR 28,000 (ex-works), excluding excise of 12.5%.

MIP Turmoil

MIP which was announced by the Indian government for six months in Feb’16 is likely to expire in first week of Aug’16. However, it is still not certain whether it will be continued further or will be completely scrapped after the expiry.

The market has mixed opinions regarding the same. While a section believes that given the presence of cheap export offers in the global market it is imperative to continue MIP further, there is increased pressure on India at WTO (World Trade Organization) to discontinue MIP after first week of Aug’16.

In a recent meeting at WTO, India has been asked by the WTO-member countries to justify extending MIP beyond six months. MIP is a temporary measure and continuing the same is against WTO rules. Indian government is well aware that imposing MIP for long term is not a viable option but at the same time presence of trade barriers in order to restrict cheap imports is quite crucial to protect country’s domestic steel industry. Thus, at present, the government is weighing the situation prudently before coming up with its final decision on MIP.

HRC Prices as on 19 Jul’16

Source: SteelMint Research
Prices include excise of 12.5%