India’s hot rolled coil import market has started showing signs of a clear revival with local re-rolling mills beginning to make fresh bookings of ex-China HRC, taking advantage of the recent lowering of customs duty, SteelOrbis has learned on Monday, February 8, from trade and industry circles.
The sources said that many of the standalone re-rolling mills, which sourced their requirements of hot rolled coil (HRC) for value-added conversion from domestic integrated steel mills, have started placing bookings for ex-China HRC, expecting arrivals within the next two to three months.
Experts believe that the lower import duty of 7.5 percent, down from 12.5 percent earlier, would translate the landed price of ex-China HRC as a 10 percent discount on the current base prices of local HRC at $733-753/mt ex-works.
The sources said that a western India-based steel mill has reported a trade for ex-China rolling grade HRC at $670/mt CFR. The sources said that this would translate to a landed price of slightly above $700/mt, at the lower import duty.
A second deal was reported by a Maharashtra-based rolling mill at a price of $665/mt CFR for ex-China HRC, excluding the duty.
“To protect the interests of end-user industries from a sharp steel price rise, the government has announced a reduction in custom duty on steel products, which would make imports more competitive. In the medium-to-long term, domestic steelmakers are also likely to benefit from the government’s INR 2.87 billion allocation to the Jal Jeevan Mission (Urban) scheme and the addition of 100 more districts to the city gas distribution network,” Indian credit rating agency ICRA stated in its latest report.
It was pointed out that imports of HRC from Japan and South Korea by large Indian end-users are not expected to change significantly as such inward shipments were already subject to a zero duty rate.
“In the near term, Indian mills will face a challenge to hold on to current base price levels. It is to be watched how local producers face import competition, which is surfacing after a very long time. Meanwhile, it is positive for re-rolling mills which are getting access to cheaper raw material [HRC] and will get a cost advantage in supplying cold rolled coils in the market,” a steel sector analyst with a financial services firm said.