Posted on 02 Jun 2022
Following the 15% export duty imposition, Indian steel mills are seen exploring possible ways to maintain shipments abroad by either bearing the tax burden or by modifying the grades produced. The former option looks lossmaking for many, while the latter could bring some movement in export trade, sources tell Kallanish.
“Currently, price is not the priority for mills,” says a senior trader. “Right now, their [mills’] main priority is looking for the region where they can place alloy grade HRC. But it doesn’t mean that mills will go down to any levels to please the buyer. There are restrictions; it doesn’t mean mills will adversely dent their margins.”
Amid duties on regular grades of hot rolled coil, India has started offering alloy-added DD11 HRC to Europe. An offer was heard from one Indian steel giant at €800/tonne ($858) cfr Italy, equating to around $750-760/t fob India; however, the deal was not confirmed.
“India has a restriction on exporting the regular grade of structural grade HRC; in the same way, European buyers also need to get clearance from customs to import any non-traditional grades of HRC,” opines a Europe-based source. “The DD11 grade is acceptable there and, in the coming days, India will aim to export this grade to the union.”
Offers to Vietnam are heard at $770-780/t cfr Ho Chi Minh City (HCMC). A deal for 30,000 tonnes of Indian-origin SAE 1006 2mm+ HRC was heard concluding this week at $748/t cfr HCMC for July shipment.
“This is the short position taken by a Chinese trader in Vietnam,” says a source. “The mill didn’t sell the cargo directly; the trader took the risk on the back of current downward sentiment, followed by the upcoming monsoon when the market plunges dramatically.”
In the Gulf Cooperation Council, a few initial quotes for alloy-grade HRC were heard at above $840/t cfr United Arab Emirates. However, actual offers on firm enquiries are expected to stand at around $800/t cfr UAE.
“Mills have stopped offering now,” says a source based in UAE. “They are directly informing the buyers of their boron-added HRC and asking them for bids. Structural grade buyers will have a problem in importing boron-added HRC on their boron restrictions, but the regular buyers will be okay with this alloy grade.”
The duties have meanwhile brought down domestic HRC prices in India. Offers for E-250 grade HRC are noted at INR 64,000-64,500/t ($825) ex-Mumbai, for E-250 at INR 67,000-67,500/t ex-Mumbai and GP at INR 72,000-73,000/t ex-Mumbai. JSW, meanwhile, revised its June-delivery quotes to INR 65,350/t ex-Mumbai, sources inform.
Source:Kallanish
