Fall in Indian currency and anticipation of safeguard duty are compelling Indian importers to act cautiously.
As per trade sources, domestic HRC prices are keeping stable. With imports getting costlier following currency depreciation, Indian importers are not showing any buying interest in cheap Chinese offers. Also with news of safeguard duty doing rounds in the market, domestic players are going steady with their HRC prices. 2.5 mm (IS2062) grade HRC is being assessed at INR 32,500/MT (ex-Mumbai) and INR 33,000/MT (ex-Delhi). (All prices include excise of 12.50%). Domestic prices are expected to pick up once importers run out of their inventories.
“Prices are stable at the moment; steel mills are holding sufficient inventories at their plant site. Prices may not rise till those inventories are cleared. However, we expect some bounce back in September or October, when imports and domestic inventories start coming down”, said a senior executive at an Indian steel mill.
With INR touching a 2-year low of 66.55/USD following depreciation in Chinese yuan, Indian importers are withholding their HRC purchases from foreign shores.
Chinese export offers go down further
Yuan depreciation has led to strengthening of USD, resulting in depreciation of many currencies including INR. Chinese players are offering their HRC at lower prices owing to better realizations in export market. Currently 2.5 mm grade HRC (SS400) from China is being assessed at USD 310-315/MT, CNF India basis which was USD 320-325/MT, CNF India last week.
“Indian importers are not keen to take any positions as they fear that government will impose safeguard duty on hot rolled coils. Chinese exporters may cut their offers further owing to devaluating Yuan.” said a Chinese steel mill representative based in Mumbai.
Source: SteelMint Research
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