Local Indian hot rolled coil (HRC) base prices have remained stable, but the tradeable price has increased slightly, with threats of ex-China import competition receding somewhat, SteelOrbis has learned from trade and industry circles on Monday, February 22.
The sources said that there has been strong market speculation about China slashing its export rebate on HRC shipments overseas, and this would mean higher focus on the domestic market by Chinese steel mills and reduced expectations of cheaper ex-China arrivals in India. Moreover, local prices in China have posted sharp rises after the holiday, also lowering expectations of cheap export sales in the near future.
Indian steel mills have maintained HRC base prices at INR 53,500-55,000/mt ($737-757/mt) ex-works, but the tradeable price is on average INR 1,000/mt ($14/mt) higher for ex-Mumbai deliveries, with more buyers returning to local sourcing.
“There is a lot of chatter on the possible impact of withdrawal of the export rebate in China. Once a reality, it would mean that there will not be cheaper material on offer. This will translate to less import competition for Indian steel mills,” a steel sector analyst with a Mumbai-based financial firm said.
“There will be a reset in the steel export market, with prices increasing in the Asian region particularly. HRC exports will shift to South Korea and Japan in face of lower Chinese competition. But this will have a minimal impact on Indian import dynamics as arrivals from these countries had already been at nil rate of duty. Incremental import competition in the wake of the reduction in Indian import duty was expected early this month from China, which does not seem a possibility if cuts in the export rebate materialize,” he added.
$1 = INR 72.60
