Local Indian hot rolled coil (HRC) trade prices have surged following the formal recommendations for a levy of a temporary 12 percent safeguard duty on imports and steel mills getting some headroom to hike base prices for April, SteelOrbis learned from trade and industry circles on Monday, March 24.
Sources said that HRC trade prices are up INR 1,000-1,500/mt ($12-18/mt) to INR 51,250/mt ($598/mt) ex-Mumbai and up by similar amount to INR 52,000/mt ($607/mt) for ex-Chennai deliveries in the south.
Discounted sales at the level of distributors particularly seen in the western region in earlier weeks have been completely halted, amid the expected price increases likely to be effected by producers.
Market participants expect mills to increase April listed prices by the range of INR 1,000-1,500/mt ($12-18/mt).
According to a sector analyst with a Mumbai-based financial advisory firm, once the 12 percent safeguard duty is put into effect, it will offer mills “some more headroom” to increase domestic prices.
He said that quick “back-of-envelop” calculations indicate that, at a CFR price of $498/mt for imports of HRC of non-FTA origin, the landed price would work out at around INR 55,000/mt ($633/mt) inclusive of basic customs duty, cess, safeguard duty, cess on safeguard duty and port handling charges.
However, despite having headroom to hike listed prices, he said that mills were likely to go in for incremental increases to avoid resistance in the market as a section of users are already lobbying against the checks on imports and rising prices of steel in the local market.
However, a section of market participants said that data based on vessel arrivals did not indicate any slowdown in imports in the current month with an estimated 180,000 mt having already arrived at ports during March 1-17 and another 35,000 mt expected before the end of the month.
$1 = INR 86.90