Indian hot rolled coil (HRC) exporters are still cautious with negligible volume trades reported over the past week, as overseas sales opportunities are squeezed by the imposition of the 15 percent export tax, SteelOrbis learned from trade and industry circles. But sellers are trying to remain their presence, especially in markets in the Gulf and Europe.
Ex-India HRC prices are at $780-810/mt FOB, with only stray small-volume trades concluded by local mills, bearing the cost of the 15 percent import tax “expecting the levy to be for the short term and needing to maintain a market presence in the longer-term interest,” a source said. The price range is $15/mt lower on average from last week.
There was information in the market that a western India-based mill concluded a modest trade for 4,000 mt with a Gulf-based buyer at $770-780/mt FOB, which, prima facie, indicated almost a negative realization after the seller bears the 15 percent tax cost. The CFR price is said to be close to $830/mt CFR.
It was pointed out that this would be the short-term trend whereby exporting mills would have to look at overseas sales at marginal or even negative realizations as “developing export markets takes years and cannot be disturbed by unplanned tax levies defying economic logic,” a source said.
Moreover, some Indian mills have already started to offer boron-added HRC, which is free from the export duty levied on non-alloy steel. In particular, an offer to Europe has been heard at $910/mt CFR from India for boron-added HRC, translating to around $810/mt FOB or so.
India’s quota for the second quarter in Europe is 314,545 mt (273,000 mt is the Indian quota + 41,000 mt are transferred). As for now, 215,000 mt have already been cleared at customs or are waiting to be unloaded. At the moment, India is offering HRC for July shipment mainly, which will be included in the third quarter quota in Europe.
“From mid-January onward, Indian steel exporters gained a deep footprint in Europe. Shipments to the region peaked in March. Now, Indian mills are reassessing and reworking on pricing following the imposition of the export tax. Mills will also need to talk to overseas buyers and explore options of selling alloy HRC as the export tax is only applicable for non-alloy HRC,” an official at a private mill said.
“A revival in prices for the July-September quarter may offer a small window to Indian exporters to seek overseas sales, limiting the incidence of the tax on the seller,” he added.
