Indian HRC Manufacturers hold Export Offers on lower Realizations 

HRC export offers remained stable W-o-W on low realizations. Trading has been muted as offers quoted by Indian manufacturers in the international market are quite high. Chinese HRC offers were as low as USD 410 CIF Middle East, which is quite competitive as compared to offers from Indian manufacturers.

Trade sources talking to SteelMint revealed that the Indian offers were unchanged at USD 430-440/MT FoB India for IS 2062 grade. Considering  the net sales realization for HRC 2.5mm in domestic market, it would be INR 32,000-33,000/MT compared to INR 26,500-27,500/MT for exports.

Indian manufacturers are holding export offers with anticipation that government may raise import duty on steel in upcoming budget, which might improve domestic demand.

Impact of Import Duty  

International trading houses are of a view that pricing pressure in India is likely to continue till the budget wishes are fulfilled. An import duty hike on Flat Steel imports is necessary to protect the domestic industry. A market participant commented,

“If import duty is raised to 15% from 7.5%, it will bring in some relief to the domestic Steel industry, but a 2.5% hike will not make significant impact in the market.”  

Chinese Threat

HRC offers from China are expected to be revised, once the trading activities resume after holidays. Some market participants speculate that Chinese HRC offers may fell further and this might affect international offers.
HRC offers to SE Asia is at USD 420-430/MT CFR levels. Korean and Japanese offers continue to dominate this market.