Almost everyone in the Indian flats market had been certain that the country's import duty on flat steel would be increased from five percent to ten or fifteen percent; subsequently, there was great disappointment among local market players (mostly producers) due to the lack of any action by government on the issue. On the other hand, in particular the number of HRC import deals has been increasing in recent weeks. It is observed that mostly Russian and Ukrainian producers, and also European producers, are involved in these deals. It should be noted that besides the producers that import HRC in order to produce CRC, these deals are being concluded mainly by end-users. Considering that local production HRC prices have been at an average of $510-530/mt ex-warehouse since January, delivered to India price levels at $450-470/mt now seem to be more attractive despite the five percent import duty.
On the galvanized side, while Indian export offers for 0.5 mm 100gr/m² zinc coated HDG prices were at $700-720/mt FOB in mid-December 2008, the price levels have fallen by approximately $80/mt since then to $630/mt. However, the prices in question have been on a flat trend since January.
On the HRC side, whereas prices in the local Indian market were at $480-500/mt ex-warehouse in mid-December, the local price levels for HRC have increased by an average of $30/mt since that period.
Meanwhile, from mid-December up to the present, import HRC offer prices have increased by an average of $20/mt and are currently standing at around $440/mt.
In conclusion, the destocking process in India is still ongoing and the general trend for 2009 will become clear depending on the first quarter balance sheets of businesses in the sector. In this context, steel market players are concerned over the downward revision ArcelorMittal has made in relation to its first quarter profit forecast. Once again, this forecast serves to remind us that the end-user performance will need to be monitored very closely in the coming period.