Indian flat steel imports came to a near standstill during the past week prompted by a combination of strengthening of ex-China offers, depreciating local currency and rising tension in the sub-continent, traders said on Wednesday, February 27.
Market sources said that combination of steady hardening of ex-China offers and weakening Indian rupee made merchant exporters cautious in committing fresh import contracts.
The uptrend of the exchange rate of the rupee against the US dollar was reversed early during the week and the market expected the local currency to be hit by the rising tension between neighboring India and Pakistan.
According to sources, uncertainty over the local currency and rising political tension in the sub-continent following Indian air-strike deep into Pakistan, which the Indian government alleged to have been aimed at terrorist bases but denied by Pakistan cast a cloud over market sentiments.
“The market is extremely wary of the escalating tension between the two neighboring countries and risks of Pakistan military retaliation against the Indian air strike. The impact of this on the local currency is just one of the anticipated fall-outs while there are so many risk and uncertainties if the situation does not de-escalate. Hence trade activity is bound to be impacted,” a Mumbai-based trader said.
“As it is, large local steel mills are trying to push up local flat steel prices and not in mood to aggressively push volumes overseas. Political tensions in the region have only made matters worse,” the trader added.
Ex-China HRC offers to India
Ex-China hot rolled coil (HRC) offers have moved up by $5/mt week on week to $525/mt CFR Mumbai, according to market sources.
The sources said that while no transaction has been reported during the past week by large domestic steel mills, only marginal volumes were contracted by few merchant traders early in the week.
The sources estimated that total import volumes contracted by such merchant imports would not exceed 3.000-4.000 tons.
Ex-China CRC offers to India
Ex-China cold rolled coil (CRC) prices have also firmed up by $5/mt over the past week to $555/mt CFR Mumbai according to market sources.
However no transaction of any significant volumes has been reported by either large steel mills or merchant traders, the sources added.
Ex-China plate offers to India
Ex-China plate offers have increased by $5/mt week on week to $595/mt CFR Mumbai but no transaction has been reported in the market during the past week, sources said.