India’s local hot rolled coil (HRC) trade prices have remained stable but negative sentiment on the pricing outlook based on rising import competition has outweighed any positives from the scrapping of the export tax on finished steel announced by the government, SteelOrbis learned from trade and industry circles on Monday, November 21.
Sources said that HRC trade price have remained unchanged at INR 56,000/mt ($686/mt) ex-Mumbai and stable at INR55,750/mt ($683/mt) ex-Chennai in the south.
“The scrapping of the export tax on finished steel is largely being ignored by the market and may have a limited impact. Factoring in the global downturn in steel demand and prices, ex-India volumes may increase slightly following the export tax scrapping but not in terms of price,” a Mumbai-based steel sector analyst with a financial advisory firm said.
“Mills are still assessing new pricing and their export focus. Indications are that export allocation volumes will increase, but price realizations are unlikely to improve given the global weakness. Higher export allocations are also likely to have a very limited impact on domestic prices, as on the supply side, rising ex-Japan and ex-South Korea imports will keep the domestic market under pressure. Imports are gaining a pricing advantage over local trade prices,” he said.
At least two traders said that market expectations discounted any headroom for mills to increase December base prices in the face of import competition getting stronger and the best case would be for mills to be able to maintain current base price levels.
“Mills are expected to announce fresh export offers over the course of the next few days. The moot point to watch is if there is any buying interest from key overseas markets when most trades are showing a declining trend,” one of the traders said.
$1 = INR 81.60
