- Imported HRC offers fell to USD 440-450/MT, CNF India
- Export offers from India have also fallen to USD 460-470/MT, FoB India
- Strong Indian currency
Domestic HRC prices are under pressure due to steep correction in international prices. HRC offers from China have fallen by USD 25/MT within a week’s time. Similarly, offers from Russia have also corrected by up to USD 30-40/MT within a span of 20 days.
Industry experts view this as a difficult period for Flat steel manufacturers in India as HRC from China is offered at around USD 450-460/MT, CFR India. Whereas, offers from Russia are in the range of USD 440-445/MT, CFR. Talking to an official of an international trading company, SteelMint learnt that although offers are quite alluring, no buying interest was seen at these levels. He said,
“We haven’t seen any buyers for Chinese HRC products. Although, imported HRC offers from Russia are quite attractive, the shipment delivery takes more than one and half month. This longer transit period involves significant risk on buyers side due to volatility in prices and exchange rates. Thus, buyers are more inclined towards domestic offers. Moreover, buyers can re-negotiate with domestic manufacturers for discount depending on payment conditions and lifting volumes. Whereas, this is not possible for imported offers once the deal is being finalized.”
Domestic Price Concern
HRC export offers have fallen by USD 10-15/MT compared to last week owing to falling global prices and lack of demand. Currently, HRC offers are in the range of USD 460-470/MT, FoB West Coast India. HRC prices in Europe, US and Middle East have corrected by 5-6% in the last 2-3 weeks. With falling export offers, traders expect a correction of INR 500-1,000/MT. Traders based in Mumbai offered HRC at as low as INR 38,000-38,500/MT levels for bulk orders.
Strong Indian Currency
Indian exchange rate has retraced back to the levels of INR 61.6 per USD on 17 Jan’15 after touching INR 63 per USD levels. This will further improve the prospect for imports and certainly affect Indian manufacturers’ interest.
Trading activities in South India remained low this week due to pongal holidays. A domestic trader based in South India commented,
“There is surplus inventory available at domestic manufacturers and to meet the sales target by the end of this financial year. It is likely that manufacturers may cut prices by 1-2% in upcoming weeks to clear stock. Domestic HRC is currently trading at INR 39,000-40,000/MT.”
*All domestic prices are inclusive of ED, VAT extra
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