India’s flat steel import activity has touched negligible levels during the past week despite the softening of offers across the board, largely owing to volatility in the local currency and the sustained fall in demand from end-user industries, traders said on Thursday, August 8.
“Import offers for ex-China, ex-South Korea and ex-Japan have all trended downwards during the past week, but still failed to evoke any significant booking volumes,” a Mumbai-based trader said.
“Both actual users and trader-importers have become extremely cautious about concluding fresh contracts for a combination of reasons ranging from the high volatility of the Indian rupee against the US dollar with a significant negative bias, user industries reducing their inventories in face of falling sales of finished products, and nervousness over geopolitical developments in the Indian sub-continent,” the trader added.
At least two other traders pointed out that the Indian rupee has depreciated by three percent over the last five currency trading days and has been inching towards the INR 71 to the dollar mark and importers have been unwilling to take the combined risks of currency as well as political uncertainties emerging in the region.
Importing traders have virtually pulled out of the market since concluding transactions at the current exchange rate would yield extremely thin margins when domestic demand is slowing down on a weekly basis compared to even last month when import contracts were concluded at levels of around INR 68 to the dollar, the two traders observed.
Ex-South Korea and ex-Japan hot rolled coil (HRC) offers have softened by around $5/mt week on week to the range of $535-540/mt CFR Mumbai, according to market sources.
The sources said that, while traders have stayed away from concluding any fresh bookings for ex-Japan, ex-South Korea materials, a few end-users have concluded small-volume transactions but, since all these trades were concluded directly between importing users and producer-exporters, details of the booking volumes have not been available in the market.
Ex-China HRC offers have also moved down by $5/mt to the levels of around $500/mt CFR Mumbai, according to market sources.
Comparatively cheaper ex-China material has also failed to evoke any significant booking volumes during the past week, with sources saying that only a few western India-based stand-alone rolling mills have reportedly concluded bookings for a nominal volume estimated at around 2,000-2,500 mt.
Ex-China cold rolled coil (CRC) import offers have decreased by $5/mt during the past week to $510/mt CFR Mumbai, according to market sources.
While no trader-importer is reported to have been active in this segment, most end-users also refrained from making any fresh bookings except for a nominal volume of around 2,000 mt reported to have been booked by a southern India-based consumer durable manufacturers, the sources added.
Import steel plate offers to India
Ex-China plate offers to India have remained stable during the past week at $545/mt CFR Mumbai, according to market sources, who added that there were no reports by any significant transaction during the past week.