It is reported that impacted by falling Chinese domestic steel price, piling up steel inventory and the worry of government’s restriction on cash liquidity, Chinese mills are decreasing their HRC export quotations.
As per market reports, most of the offers from Chinese sellers for HRC in SS400 grade for 3mm to 12mm thickness in standard widths of 1250mm & 1500mm are in the range of USD 570 per tonne to USD 575 per tonne CNF basis.
But some of the aggressive sellers, who have sold large volumes of Chinese HRC into India in last 6 months, are reported to have offered USD 565 per tonne CFR India also. Market sources expect that Chinese mills may agree for lower prices if firm bid is presented to them
The offers for this spec were in the range of USD 580 per tonne to USD 590 per tonne in the first week of January.
Considering the current USD:INR exchange rate of 46.07, USD 565 per tonne on CFR basis translates to less than INR 28,000 per tonne EX port plus CVD and 4% SCD as against about INR 31000 plus per tonne from Indian domestic producers on like to like basis thus improving import viability.
Unconfirmed reports also pointed out of a recent transaction of import of Chinese HRC in cold rolling grade at USD 580 per tonne on CFR basis.
But Indian buyers are adopting cautious approach as the Indian domestic prices of HR may weaken on global pressures by the time cargos arrive. Moreover, Chinese mills may reduce prices further before they break for New Year vacations in mid February.
On the other hand, CIS HR producers are looking to increase levels and we need to wait to see their reaction to Chinese aggression.