Despite the overall slowdown in Indian flat steel market activity, the sharp lowering of ex-China offers has triggered an increase in import bookings, with end-users reported to be shifting their preference to imports over domestic supplies, traders said on Wednesday, January 23.
“Even though traders have been cautious about making fresh import bookings considering their already-high inventories, end-users have been active in concluding import transactions after the lowering of offers during the past week,” a Mumbai-based trader said.
“With local steel mills determined to maintain their base prices unchanged, the difference between the landed price of ex-China flat steel products, inclusive of taxes and port charges, and Indian domestic prices has narrowed and end-users have been seizing the opportunity to rely more on imports to lower the costs of their production,” the trader added.
Ex-China hot rolled coil offers have moved down by $25/mt during the past week to $490/mt CFR Mumbai, according to market sources.
The sources said that Chinese HRC exporters have been aggressively pricing their offers to push volumes overseas in order to liquidate stocks ahead of the Chinese New Year holiday (February 2-10) and have been successful in increasing volumes contracted with Indian end-users.
According to market sources, deals for an aggregate volume of 7,000-8,000 mt have been concluded during the past week for ex-China offerings.
However, import interest in ex-South Kore HRC imports has been very limited, with Indian buyers unwilling to pay the marginally high premiums on such shipments, the sources added.
Ex-China cold rolled coil (CRC) offers have also moved down by $20/mt during the past week, softening to $525/mt CFR Mumbai, according to market sources.
The sources said that import contracts for an aggregate of around 6,000 mt have been concluded during the past week largely by end-users among commercial vehicle manufacturers and southern Indian consumer durable manufacturers.
The sources said that a small volume of ex-China CRC, estimated at around 2,000-3,000 mt, was contracted by Indian traders for re-export to neighboring countries, to take advantage of opportunities for price arbitrage that prevailed during the past week.
Ex-China plate offers to India
Ex-China plate offers have decreased by $20/mt over the past week to $570/mt CFR Mumbai, but no significant transaction has been reported in the market by either end-users or traders, market sources said.