A sharp fall in ex-China flat steel offers coupled with imminent hike in prices by local Indian steel producers triggered a surge in concluding import contracts during the past week, traders said on Wednesday, June 5.
“The local flat steel market is expecting a sharp increase in base price ranging around INR 1,000/mt on to offset rising input costs. This would significantly increase the price differential between domestic product and landed price of imported flat products and more so after reduction in ex-China offers during the past week,” a Mumbai-based trader said.
“In view of this changing price dynamics between imported and domestic flat products, merchant exporters were seen to be increasing contract volumes of imports,” the trader added.
Ex-China hot rolled coil (HRC) offers have decreased by $20/mt week on week to $530/mt CFR Mumbai according to market sources.
The sources said that both number of import bookings and average contract volumes have increased sharply during the past week with the market players anticipating local end users to focus rapidly towards imported material, once local steel mills complete upward adjustments of their base prices.
Citing reports available in the market, the sources estimated that aggregate volume bookings to be in range of 12,000-14,000 mt by merchant exporters. Even some large local steel mills reportedly booked around 8,000-10,000 mt of ex-China HRC for their own captive conversion requirements.
Ex-China cold rolled coil (CRC) offers have declined by $20/mt during the past week to $540/mt CFR Mumbai, according to market sources.
The sources said that most of the import activity was accounted by merchant traders who reportedly booked estimated volumes ranging 8,000-10,000 tmt with part of volume earmarked for re-exports to neighboring markets like Nepal.
Ex-China plate offers to India
Ex-China plate offers have moved down $20/mt week on week to $570/mt CFR Mumbai, according to market sources.
Reports available in the market indicated that at least two southern India based pressure vessel manufacturers booked aggregate volume of around 8,000 mt for own consumption while Mumbai-based traders concluded contracts for aggregate volume of 4,000 mt during the past week, the sources added.