Indian steel circuit is once again abuzz with the news of MIP (Minimum Import Price) likely to be announced by the government on steel imports. However despite this anticipation, prices of domestic HRC/CRC have registered a fall of INR 500-1,000/MT in the start of February month.
Current offers for 2.5mm HRC (IS2062) are being assessed at INR 29,000/MT (ex-Delhi), INR 28,000 (ex-Mumbai) and INR 30,000-30,500/MT (ex-Chennai). All prices include excise of 12.5%.
While offers for 0.9 mm CRC are assessed at INR 34,000/MT (ex-Delhi), INR 32,500-33,000/MT (ex-Mumbai) and INR 33,500-34,000/MT (ex-Chennai). All prices include excise of 12.5%.
“Prices have fallen despite MIP anticipation because demand in domestic market is already sluggish. Also there is no strong evidence that MIP and safeguard duty rumors will turn in to reality this time as the same kind of rumors were heard in December month also”, quoted a trader based in Delhi.
MIP Dilemma
After the announcement on 8 Jan’16 that government is not in a rush to announce MIP on steel imports, domestic flat steel market witnessed downtrend in its prices.
However in last 2-3 days, MIP rumors have gained momentum once again and steel market participants have become uncertain about the future price trend.
SteelMint has heard that Steel Ministry is pushing for MIP imposition while Commerce ministry is opposing the same stating that imports in 2015 were only 15% against 9% in previous year and that 85% of country’s steel demand is still met domestically with Indian steel companies operating at 80% capacity.
While downstream users are resisting MIP proposal specifying that the proposed MIP is so high that it would not be in the interest of overall economy, bankers are lobbying for higher protection pointing out the risk arising from increasing NPA (Non Performing Assets).
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