India’s flat steel import activity declines amid currency weakening, fears of new import curbs

Friday, 23 August 2019 16:47:23 (GMT+3)   |   Kolkata

India’s flat steel import activity has come to a near standstill during the past week in response to the combination of a further weakening of the local currency, a glut at both end-users and dealers, misplaced apprehensions of fresh import curbs and cautious buyers remaining on the sidelines despite the softening of offers, traders said on Thursday, August 23.

“Financing of imports has become very challenging. Not only the Indian rupee hitting a new six-month low has made imports expensive, but market intermediaries are starved of import financing lending from financial institutions,” a Mumbai-based trader said.

“As for actual users, most finished steel consumers are reeling from depressed sales and there is just too much material available in the local market at the same time. Even existing finished steel inventories of end-users have become a burden of carrying costs in the face of production cuts,” the trader added.

Sources said that the market has also been unnerved by mid-week reports in a section of the steel industry media that the Indian government was considering the imposition of flat safeguard duties across finished steel imports. Although such reports were subsequently dispelled as false, theh clarification came too late and buyers have mostly retreated to the sidelines, resulting in sparse trades in the market, the sources said.

Import HRC offers to India

Ex-China hot rolled coil (HRC) offers have softened by $10/mt during the past week to $490/mt CFR Mumbai, market sources in India have said. However, even lower offers have not triggered any significant contract volumes as importers have not been in any position to face the currency risks inherent in September deliveries, the sources added.

Just a few traders concluded import contracts for nominal volumes to meet their re-export obligations to neighboring markets like Nepal, with the aggregate volume estimated at not more than 3,000 mt during the past week.

Ex-Japan prices have slipped by $5/mt week on week to $530/mt CFR, attracting limited interest in purchases.

Import CRC offers to India

Ex-China import offers for cold rolled coil (CRC) are marginally down by $5/mt week on week to $500-505/mt CFR Mumbai, according to market sources.

However, automobile companies - one of the largest importers and currently in sustained distress - do not want to build up inventories having already cut down production and this has resulted in virtually no trades from this sector, the sources said.

Even ex-Japan and ex-South Korea CRC, generally priced at a 10-15 percent premium for their higher quality, have attracted no buying interest from end-user industries.

Imported steel plate offers to India

Ex-China steel plate offers to India have moved down $15/mt during the past week to $530/mt CFR Mumbai, according to market sources, who added that no trades have been reported in the market during the past week.


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