Posted on 30 Oct 2024
Indian domestic hot and cold rolled coil prices remained stable week-on-week due to low market activity amid the Diwali holiday week, Kallanish learns from domestic sources.
In addition to the impact of the holidays, domestic demand also continued to be weak amid persisting high inventory due to cheaper imports, especially from China and Vietnam.
A source says the local market is “saturated” due to high imports. Another trader concurs, noting the continuing demand weakness is due to excessive supply especially from cheaper-origin imports and due to a liquidity shortage in the market.
As per some market estimates, domestic producers' steel inventory is worth close to INR 890 billion ($10.6 billion) since the start of the current fiscal yeae (FY25). A local media report notes the steel ministry is monitoring the issue of high inventory.
Some traders expect the market will see improved demand and a boost in prices post-Diwali, in the second half of November. Diwali week runs between 28 October-3 November. The market usually sees a lull in activity a few days before and after Diwali.
Another market participant expects demand and subsequent price pressure on coils to ease in the second half of December, after the remaining import shipments from Japan, South Korea and Vietnam arrive in India.
The market is also eyeing potential import restriction announcements by the government, to curb inflows. The Indian government may opt for a temporary safeguard duty instead of hiking its basic customs duty, as this would be the fastest and most effective route to curb Chinese imports. It is also considering implementing certain additional restrictions on quality measures (see Kallanish passim).
Indian domestic HRC offer prices are flat week-on-week at INR 46,500-47,500/t ($553-565/t) ex-Mumbai for IS2062/E250 BR grade.
Domestic CRC offers are also stable on-week, for the fourth consecutive week, at INR 55,000-56,000/t ex-Mumbai, for IS513 Grade O.
Domestic HR plate offers were flat on-week at INR 49,000-49,500/t ex-Mumbai, for base E-250 or S235 equivalent grade.
In the imports market, China, Vietnam, Japan and South Korea all remained off the market for the second consecutive week. Vietnam, Japan and South Korea have free trade agreements with India and do not pay the additional 7.5% basic customs duty which China currently faces.
The last heard China-origin import offers were at $490-495/tonne fob China or $520-525/t cfr Indian ports, for commercial-quality base grades.
Chinese suppliers’ Indian BIS licences expire on 2 November and Vietnam’s BIS licence expires on 4 December. Indian importers are also wary of booking deals from Vietnam due to the ongoing anti-dumping probe against Vietnam-origin HRC. Sources say they do not expect China and Vietnam's BIS licences to be renewed soon.
The last heard Japan and South Korean offers were at $510-530/t cfr Mumbai, for commercial-quality base HRC grades. All import quotes are for the same grades and shipment times.
Imported HR plate offers from FTA countries, notably Japan and South Korea, were heard at below $600/t cfr Mumbai this week, for S355 grade, November shipment.
India-EU coil export activity remains slow amid weak EU demand, dumping risks, and EU mills opting to buy locally due to lower prices (see separate article).
Source:Kallanish
