India Steel Market Watch
October 14: HRC offers remained stable after some primary producers raised prices taking advantage of the 20% safeguard duty imposed on hot rolled coils, industry sources said.
Government recently imposed a 20% “safeguard duty” on certain categories of imports to protect local producers. The duty was imposed with immediate effect on hot-rolled flat products of non-alloy and other alloy steels, in coils of a width of 600 mm or more.
Major steel producers have announced a price hike on flat steel products, taking advantage of the 20% safeguard duty imposed on hot rolled (HR) coils. The country's largest state-run steel producer Steel Authority of India (SAIL) has raised prices of flat steel products like HR coils by Rs 700 per ton. Essar Steel too decided to raise prices by Rs 500 per ton on its range of flat products with immediate effect.
Similar moves are expected to be made by other private sector players too within the next few days, causing a furore among a section of the steel users. They have protested against the hike and called for a level playing field.
Analysts were surprised by the timing of hike since the steel market remains lacklustre and the price increase came close on heels of the safeguard duty.
Reacting to the price hike a sizeable section of steel users have called for imposition of a 20% anti-dumping duty on finished steel products to counter the 20% provisional safe guard duty on hot rolled coils a key raw material for value added steel products like seam less tubes & pipes, engineering and fabrication as well as the auto sector.
Sources said Chinese and Russian exporters have factored in the 20% provisional safeguard duty in their offers.
Current import offers were further lowered by $1 per ton $297 per ton CFR for November shipments, sources said.
Some sources said the safeguard duty would help steel mills increase capacity utilisation levels rather raising prices too much.
In the April-August period of 2015-16, India’s imports of non-alloy flat steel rose 50.4% year-on-year to 3.26 million tons from 2.17 million tons in the same period last year, provisional steel ministry data showed.
Imports of HR coils rose 131.1% to 1.52 million tons during the period, while import of plates rose 59.1% to 483,400 tons during the April-August period.
GP/GC Sheet & coil imports rose 36.6%, while CR coil/sheet imports rose 11% during the period.
$1=Rs 65.05