Posted on 27 Nov 2024
Indian domestic hot and cold rolled coil market demand remains weak due to oversupply and import pressure. Sentiment remains muted despite the Bharatiya Janata Party (BJP) win in Maharashtra’s state election, Kallanish learns from sources.
Domestic traders say demand is still muted and prices are slightly lower week-on-week. A source notes: “We are not seeing any signs of improvement in the demand trend, either locally or [in the] international market.”
Another source says the market is awaiting the formation of a government in Maharashtra that should provide policy direction clarity.
However, the market anticipates BJP’s Maharashtra election win will help with more infrastructure and development related project announcements, especially in the western region of India.
Maharashtra’s state elections or legislative assembly results were announced on 23 November. The BJP-led Mahayuti alliance won by a large margin in the state.
Maharashtra is considered a significant election state as its capital Mumbai is the financial market centre in India. The state also accounts for nearly 60% of steel business in the country.
The Indian market is facing oversupply due to the commissioning of new mills by JSW Steel, Jindal Steel and Power (JSPL) and others. Other factors such as an ongoing liquidity shortage, import pressure, smog and worsening air quality in Delhi National Capital Region, in northern India, are further adding to the demand weakness.
JSW Steel’s 5 million tonnes/year hot-strip mill (HSM) in Karnataka went online in April, while JSPL commissioned a 6m t/y HSM in Angul, Odisha in January (see Kallanish passim).
Indian domestic HRC offer prices fell marginally, by INR 250/tonne ($3/t) week-on-week, to INR 47,250-47,750/t ex-Mumbai for IS2062/E250 BR grade.
Domestic CRC offers were flat on-week at INR 55,000-56,000/t ex-Mumbai, for IS513 Grade O.
Domestic HR plate offers also remained flat on-week at INR 49,000-49,500/t ex-Mumbai, for base E-250 or S235 equivalent grade, while domestic GI offers were down INR 500/t on-week at INR 57,500/t ex-Mumbai.
In the import market, China and Vietnam continued to remain out of the market due to BIS licence expiry. China's BIS licence expired on 2 November. Vietnam-origin offers have also paused due to the ongoing anti-dumping probe against Vietnam-origin HRC in India. Vietnam's BIS licence will expire on 4 December.
Last heard China-origin import offers were at $490-495/t fob China or $520-525/t cfr Indian ports, for commercial-quality base grades.
Japan and South Korean offers were heard flat on-week, at $525-530/t cfr Mumbai, for similar grades and shipment times. Vietnam, Japan, South Korea and the ASEAN bloc have free trade agreements with India and do not pay the additional 7.5% basic customs duty which China currently faces.
Imported HR plate offers from FTA countries, notably Japan and South Korea, were flat on-week at around $550/t cfr Mumbai this week, for S355 grade, December/January shipment.
Indian HRC export activity to the EU continues to be weak due to factors such as weak EU demand and potential anti-dumping duties on Indian material (see separate article).
Source:Kallanish
