In the local Indian flat steel market, SAIL production 2 mm HRC prices are at INR 28,500-29,000/mt $615-626/mt) excluding duties - down INR 1,750/mt ($38/mt) compared to last month, whereas the Ispat production HRC base price level is at INR 29,000-29,500/mt ($626-637/mt) - down INR 1,500/mt ($32/mt) compared to last month. All the above prices are ex-works. Meanwhile, Chinese origin HRC offers to India for 3-12 mm material have increased by $10-20/mt compared to last week and are now standing at $520/mt CFR India. Despite all adjustments, local production HRC ex-works prices (with all duties included) in the Indian domestic market are still higher, by $60/mt, compared to the Chinese numbers; however, one should also note that in recent weeks the price gap in question between domestic and Chinese materials had been standing at $80/mt. Most importantly, various Indian distributors comment that the current $50-60/mt gap does not offer any great advantage to Indian buyers.
Local Indian flat steel producers hope that the ex-China offers will maintain their uptrend; thus, they will not be obliged to make new price adjustments. But according to market sources, the year-on-year data indicate that total hot rolled inventory in China is now 167.35 percent higher, and so the increasing stock levels in the Chinese domestic markets may result in increased exports from China. As a result, it seems that the import pressure on India will likely be maintained for a while.
On the other hand, some market players think in general that no significant decreases in ex-China flat offers should be expected due to the pressure on profit margins caused by the lack of any great softening in costs of raw materials (such as coking coal and iron ore), with even some uptrends being observed in spot market prices for these raw materials.