The renewed weakening of Chinese flat steel export offers and the appreciating trend of the Indian currency have triggered a revival in inward shipments to India, with bulk of the hot rolled coil (HRC) transaction volumes being accounted for by local commercial importers, traders said on Wednesday, January 2.
“With markets in Southeast Asia remaining quiet due to year-end considerations, ex-China offers were lowered marginally to push flat product volume shipments into the Indian market,” a Mumbai-based trader said.
“With the Indian rupee appreciating steadily to touch INR 69 to the US dollar during the past week, this proved to be the trigger for Indian traders to make fresh bookings for February deliveries,” the trader added.
However, a section of market sources pointed out that, even though domestic demand for flat steel products has been ebbing owing to low manufacturing sector growth over the past few months, the rise in import transactions by commercial importers has been possibly due to re-export opportunities to India’s neighboring countries.
The sources pointed out that at the same time there has been no significant import transactions for ex-Japan or ex-South Korea flat steel products during the past week.
Ex-China hot rolled coil offers have decreased by $15/mt during the past week to $515/mt CFR Mumbai, according to market sources.
Local Indian traders have reportedly concluded aggregate transactions for an estimated 5,000-6,000 mt for early February deliveries, the sources said.
According to market sources, Chinese cold rolled coil (CRC) prices have moved down by $10/mt week on week to $545/mt CFR Mumbai.
The sources said that most of the import transactions were accounted for by local end-users particularly from auto manufacturers and, since most of these transactions were with overseas producers, actual estimates of volumes were not available in the market.
Ex-China plate offers to India
Ex-China steel plate offers have declined by $20/mt over the past week to $590/mt CFR Mumbai, according to market sources.
Indian capital goods manufacturers accounted for the bulk of the volumes contracted during the past week, with such volumes estimated at around 3,000-4,000 mt as local manufacturers have been seizing the cost advantages offered by the appreciating Indian rupee and lower offers, the sources added.