India’s flat steel import activity has continued to remain at low levels with negligible trades concluded during the past week and even the further softening of offers has failed to entice importers, traders said on Thursday, October 10.
According to market sources, ex-China offers received have ranged at $450-455/mt CFR Mumbai compared to $455-460/mt CFR in the previous week. Ex-Japan offers have been quoted at $460-465/mt CFR Mumbai.
“Chinese offers are reported to be softening with business activities peaking after the holidays and reports that production restrictions on Chinese steel mills are not as severe as expected earlier, leading to a higher exportable volume available,” a Mumbai-based trader said.
“But there is no demand for imports in the local markets at a time when domestic steel mills are saddled with large inventories and are amenable to offer across-the-board discounts. The shortage of trade credit from banks has also prompted importing traders to stay away from making fresh bookings with their own funds when existing stocks are moving slowly,” the trader added.
A steel sector analyst at a Mumbai-based financial services advisory firm said that the market sentiments are also nervous as Indian negotiations towards a deal for the Regional Comprehensive Co-operation Pact (RCEP) with 16 member countries have entered their last leg starting October 10.
The possibility of India pressing for an exemption of steel from the purview of any possible deal seems unlikely without risking a pull-out from the negotiations and at the same time, if India does sign the pact, it would open up duty-free imports of steel production from key producing countries like China, and hence most local market intermediaries prefer to await the outcome of the RCEP talks over the next few days before entering into import trades.