India’s flat steel imports continue to languish at negligible levels

Thursday, 19 September 2019 14:36:41 (GMT+3)   |   Kolkata

India’s flat steel import activity has continued to languish despite the softening of ex-China offers, with neither traders nor end-users having any appetite to make fresh bookings at a time when Indian steel mills continue to be saddled with rising unsold stocks, traders said on Thursday, September 19.

According to market sources, ex-China hot rolled coil (HRC) offers are down $10/mt to $470-475/mt CFR Mumbai. Some offers are also reported at levels in the lower range of $465-470/mt CFR Mumbai, but even these offers did not find any takers.

“With lending institutions and banks not willing to provide pre-shipment credit, no traders or end-users are willing to lock up their own funds in restocking, all the more so when there are adequate stocks available in the local market and end-users are unwilling to increase carrying costs of inventories by making bookings now,” a Mumbai-based trader said.

“Importers have also not yet become familiar with the Steel Import Monitoring (SIM) system which came into effect last Monday (September 16). Importers have had little clarity on the day ahead of consignment that registration was mandatory. There is also the issue of additional payment of fees based on consignment value which is an additional strain on transaction costs,” the trader added.

According to sources, ex-China cold rolled coil (CRC) offers are marginally down $5/mt at $505-510/mt CFR Mumbai, but no transactions have been reported in the market during the past week, in view of the acute distress among automobile and consumer durable companies.

The sources said that the rating agency ICRA forecasting that rate of growth of Indian steel consumption will ease to 5-6 percent during the financial year 2019-20 compared to 7.9 percent in the previous year has also triggered acute caution among importers amid apprehensions that stock movements will slow down further rather than any revival being expected. 

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