Import flat steel purchases in India have improved marginally during the past week in reaction to lower offers but trade volumes have remained low since prices are expected to touch to a new bottom over the winter season, traders said on Thursday, October 17.
According to market sources, Chinese hot rolled coil (HRC) export offers have decreased by $10/mt to $440-445/mt CFR Mumbai, as compared to $450-455/mt CFR Mumbai recorded earlier this week.
“The number of deals has increased as compared to previous weeks. But average trade volumes have continued to be limited as local importers are expecting a rise in Chinese inventories during the winter season and Chinese steel mills will try to push higher volumes overseas with more aggressive pricing,” a Mumbai-based trader said.
“But my personal reading is that there are upside limitations to how much import activity can go up from current levels considering that end-users in India have no appetite to re-stock and increase their inventories in view of continued demand depression,” the trader added.
However, at least two other sources said that most of the import contracts concluded during the past week were accounted by small merchant traders for small volumes to meet their re-export commitments to neighboring markets like Nepal rather than local sales to end-users.
It was also pointed out that over the past several weeks, no import trades were reported in the market for cold rolled coil (CRC) as major users in auto manufacturing and consumer durable manufacturers had completely pulled out of the import market even for ex-Japan and ex-South Korea material which generally ruled at a premium over ex-China offers.