Currency depreciation and safeguard duty anticipation is driving SAIL, one of India’s largest steel manufacturers, to increase its domestic HRC prices.
China’s sudden decision to devalue its currency last month negatively impacted currencies of many neighboring economies. India is one such country whose currency depreciated by about 4% following Yuan fall of about 3%.
This currency movement has provided some support to Indian steel industry, which is reeling under the pressure of cheap imports from China, Japan, and Korea. With weakening of INR, imports have become costlier and traders have currently withheld their import purchases.
Also, Indian steel market is abuzz with news of probable imposition of safeguard duty on hot rolled products. Steelmakers are bullish that Indian government will impose safeguard duty on hot rolled products by 10%, which will support domestic prices. Safeguard duty, if imposed, will increase the landed costs of imports.Thus, there is limited interest for imported coils as people fear that they will make losses if duty is imposed.
“Current offers for imported HRC from China are in the range of USD 310-320/MT and USD 355-360/MT from Japan/Korea, based on quantity on CFR India basis”, said an importer based in Mumbai.
Taking advantage of this situation, SAIL is likely to increase its HRC offers in the range of INR 500-750/MT. Other players like JSW and Tata Steel denied to comment on plans of revising their prices. Currently, 2.5 mm (IS2062) grade HRC is being offered in the range of INR 32,000 (ex-Mumbai) and INR 33,000 (ex-Delhi). All prices include excise of 12.5%.
Prices of 2.5 mm (IS2062) Grade HRC as on 4 Sept’ 15
| Particulars | Current Prices in INR/MT | Expected Prices in INR/MT |
| Ex-Mumbai | 32,000 | 32,500 – 32,700 |
| Ex-Delhi | 33,000 | 33,500 – 33,700 |
| Ex-Kolkata | 33,000 | 33,500 – 33,700 |
| Ex-Chennai | 32,500 | 33,000 – 33,200 |
*All prices include excise of 12.50%
Source: SteelMint Research
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