Indian Importers Restrict HRC Bookings over Price Disparity
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Indian importers prefer domestic HRC against imported as the former is cheaper by about INR 2,000-4,000/MT.
Indian flat steel importers have turned silent amid higher global prices and comparatively cheaper domestic offers. Currently Chinese HRC export offers are heard around USD 540-550/MT, FoB China. And HRC export offers from Japan and South Korea are at USD 580/MT, FoB and USD 590/MT, FoB respectively. At these offers landed cost of HRC to India are still costlier than present domestic prices.
HRC bookings made in early August arrived at Indian ports in Oct'17 -Market participants mentioned that buyers from India have booked an HRC shipment of around 70,000 MT from major South Korean and Japanese steel mills in the beginning of Aug'17 at around USD 530/MT CNF India and it arrived in the month of Oct'17.
They also mentioned that another deal of around 35,000-40,000 MT of HRC has been concluded with South Korea steel mills towards the end of Sept'17 which was in the range of USD 600-610/MT CFR basis and material will arrive in end Nov'17.
Landed cost of HRC imported from China,Japan,Korea to India
| Particulars | China | Japan | Korea |
| CIF (USD/MT) | 565 | 615 | 625 |
| BCD in % | 12.50% | 0.00% | 0.00% |
| CIF+BCD (in USD ) | 636 | 615 | 625 |
| Safeguard duty | Not applicable as CIF prices is greater than reference prices of USD 445/MT | ||
| Anti Dumping Duty(As per recent recommendation by | Not applicable as CIF prices is greater than reference prices of USD 489/MT | ||
| DGAD for definitive duty for HRC is at USD 489) | |||
| Port Handling (in USD) | $20 | $20 | $20 |
| Miscellaneous expenses | $5 | $5 | $5 |
| Total in USD | 660 | 640 | 650 |
| Total in INR | 42,768 | 41,472 | 42,120 |
| Countervailing Duty (18%) | 7,698 | 7,465 | 7,582 |
| Landed Cost in INR | 50,466 | 48,937 | 49,702 |
| Current Domestic HRC prices in India | |||
| Ex-Mumbai (basis prices excluding GST 18%) | 39,250/MT GST @18% | ||
| Including GST@18% | 46,300 | ||
| Premium/Discount | 4,166 | 2,637 | 3,400 |
1USD = 64.8 INR
HRC prices mentioned are of Re-rolling grade
Source-SteelMint Research
Domestic Flat steel prices remain steady amid slow buying-Major Indian mills had kept the domestic prices stable for October bookings owing to sluggish demand prevailing in the domestic market.Currently domestic HRC prices of major manufacturers are hovering around INR 40,000/MT (ex-Mumbai , GST extra @18%).However prices in traders market remained on lower side which is around INR 37,500-39,000/MT (ex-Mumbai , GST extra @18%).
The landed cost of imports to India is in range of INR 49,000-50,500/MT.Also imported HRC is expensive compared to domestic prices by about INR 3,000-4,000/MT. Will this price gap result in hike in domestic HRC prices in India for Nov'17 ? Market will have to wait to see the price announcements for the upcoming month which is likely to take place in 1st week of Nov'17.
