India: Rising imports, falling sales keep HRC trade prices range-bound

Trade level hot-rolled (HR) and cold-rolled (CR) coil prices stood rangebound across markets under assessment amid the increasing preference for cheaper import alternatives, especially for HRCs. A few import deals for September 2024 arrivals were heard booked in the first fortnight of July, BigMint learnt from reliable industry sources. A consignment of 75,000 t was booked for import in the first week at $562-565/t CFR India. In addition, 100,000 t HRCs were booked for imports at $562-566/t in the previous week. This might exert pressure on the trade market prices in the forthcoming weeks.

Meanwhile, despite the domestic mills reducing their list prices earlier this month, the trade market prices of HRC (2.5-8mm / CTL, IS2062, Gr- E250 Br.) stayed in the range of INR 52,200-54,800/t ($625-656/t). Similarly, those of CRCs hovered around INR 59,800-63,400/t ($715-759/t).

BigMint's benchmark assessment (bi-weekly) for HRC (2.5-8mm, IS2062, Gr E-250 Br.) prices fell by INR 300/t ($4/t) at INR 52,200/t ($625/t) on 16 July 2024, compared to the previous week. However, CRC (0.90mm, IS 513, CR1) prices went up marginally by INR 200/t ($2/t) at INR 59,800/t ($759/t) during the same period. These prices are quoted ex-Mumbai, excluding 18% GST, and are for cut-to-length (CTL) deliveries. (INR 1 = USD 0.0119641 ; USD 1 = INR 83.584)

Market updates:

Import-export trend for July 2024: The preference for imports is rising, resulting in lower demand for domestically produced HRCs. The import volumes for bulk HRC and Plates have reached 364,298 t till 15 July 2024, around 85% of the total of 430,835 t in June 2024 as per the vessel line-up data maintained with BigMint. Out of the total imports in July, 66,000 t are expected to arrive by 27 July. Exports volumes on the other hand stood around 64,374 t in July, around 33% less than 95,732 t in June.

Tokyo Steel, a Japanese electric arc furnace steel manufacturer has recently announced a rollover of its HRC (1.7-22mm) prices, maintaining the levels at JPY 107,000/t ($675/t) for August 2024 against the previous month. Also, a week ago, the Chinese steel major- Baosteel announced a reduction of RMB 100/t (approximately $14/t) on HRC prices for August 2024 sales.

Traders' market demand remains slow: The demand for HRCs and CRCs continued to stay lacklustre amid urgent requirement-based procurement patterns adopted by buyers.

"Market sentiment is depressed due to margin pressure along with liquidity concerns. There is need to aggressively pursue new orders which are very few and at lower levels," said a market participant. "Reports of increased import orders and a potential influx of imports are further dampening market spirits," he added.