Flat steel import transactions and volumes in India during the past week have fallen sharply in reaction to the slight strengthening of ex-China offers and the renewed weakening of the Indian currency, traders said on Wednesday, December 12.
“The import market is seeking to avert risks. The uptick in ex-China offers comes at a time when most large Indian steel mills are seeing a rise in flat steel product inventories. Also, with the Indian rupee sliding to INR 71.90 against the US dollar, there has been a sharp drop in interest among downstream Indian steel producers in concluding deals for imports,” a Mumbai-based trader said.
“Even among importing traders, only a few low-volume import transactions were concluded for ex-Japan flat steel products, while no significant inward shipment contracts were reported for ex-China material,” the trader added.
Market sources said that importing Indian traders are not sure whether the slight strengthening of ex-China offers will be sustained and so they prefer to wait on the sidelines and conclude fresh bookings only if offers show signs of seeking lower levels.
Ex-China HRC offers are marginally up by $5/mt week on week to $525/mt CFR Mumbai, according to market sources. But no significant transaction volume has been reported in the market, the sources added.
However, a few importing traders have reportedly concluded small-volume ex-Japan HRC bookings, with sources pegging the aggregate import volume at 2,000-3,000 mt during the past week for early January delivery.
The sources said that, with premium on ex-Japan HRC largely absent, importing traders showed cautious optimism in concluding such transactions.
Ex-China CRC offers have strengthened by $10/mt week on week to $585/mt CFR Mumbai, but large India steel mills which were active in the market until a few weeks ago have stayed away from making any fresh bookings, leading to inactive market conditions.
The weakening of the rupee has also added costs to the landed price of imported CRC and so importing traders have also been reluctant to make bookings, especially in view of the slowdown in existing stock movement in the Indian market, market sources said.
Ex-China plates offer have edged up by $10/mt week on week to $600/mt CFR Mumbai during the past week, but no transactions have been reported in the market by either actual users or traders, sources said.