Local Indian hot rolled coil (HRC) prices have remained unchanged during the past week at around INR 35,500/mt ($582/mt) ex-works, against the backdrop of disappointment in the market at the size of the import duty increase announced by the Indian government, traders said on Monday, March 2.
The Indian government has increased the import duty on flat and long products to 10 percent, up from 7.5 percent and five percent respectively.
According to a Mumbai-based trader, the market feels that the increase in import duty is too small to have any impact in curbing the strong flow of imported steel products into the country.
The government would have done well to push up the import duty to the full extent of the peak permissible rate of 15 percent, instead of hiking it to 10 percent, the trader said.
HRC prices are expected to move sideways for most of the current month, until there is more clarity on the pricing strategy of local steel mills, the trader forecast.
Market sources said that the transaction volume in the HRC market is unlikely to improve since local steel mills are not expected to take any hasty decisions in the current month to push through long-delayed price adjustments.
In its annual budget announced at the end of last week, the government-owned Indian Railways proposed a hike in freight charges ranging one to 10 percent, depending on distance and categories of bulk products.
The sources said that the railway freight hike proposed by the Indian government last week will also prompt local steel mills to have second thoughts about lowering their HRC prices amid slow demand and rising imports.