South Korean and Japanese steel producers are currently not offering cargoes in the Indian market due to low demand and anti-dumping duties.
South Korean mills have been selling several cargoes to Vietnam, China and the Middle-East but not in India. Offers from Korean mills in the southeast Asian markets were around $465/t cfr this week, higher than last week’s $448/t.
In India, currently there is little appetite for imported HRC as there are huge unsold inventories with domestic producers while end-user demand from construction and automobile sectors remain weak.
Also, the floor price of anti-dumping duty for Korean cargoes in India is set at $478/t while for Japanese cargoes the floor is at $489/t, making it unviable for Indian buyers. Domestic price for HRC in the key market of Mumbai averaged INR 36,000/t ($478) this week.
Japan and South Korean HRC exports to India are not charged with a basic customs duty of 12.5% as they have free-trade agreements with India. Indian steel mills are seeking imposition of border adjustment tax on steel imports despite the sharp drop in imports over the past few months. These mills are seeking an additional tax on imports to compensate for lower rates of taxation and tariff in major steel exporting nations. Low volume of imports is, however, likely to dissuade the central government from imposing any additional taxes on steel imports to avoid blowback on Indian merchandise exports.
However, with the current trend of rising HRC prices, exporters from Japan and South Korea may re-enter the Indian market if cfr India prices move reasonably higher than the anti-dumping duty threshold.
Photo Credit – World Steel
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