Indian importers are asking for a $20 per tonne reduction in
offers of commercial-grade hot rolled coil (HRC) as a weakening
rupee-dollar exchange rate has resulted in fewer transactions,
market participants told Metal Bulletin.
Offers for HRC imports into India, mainly of Chinese origin,
are currently at $660-665 per tonne cfr Mumbai for shipment in
Offers from Iran are in the same range for commercial-grade
material, while Iranian cold rolling-grade coil has been
offered at $680-685 per tonne cfr Mumbai for end of June/early
Market participants have pointed to the weakening of the rupee
as the major reason for not booking imports at these price
The rupee has depreciated to Rs52.50 to the dollar. It touched
a low of Rs53 to the dollar last week.
Cost of imports
"Currently, these offers are not viable because the
rupee has depreciated. The cost of imports will be more than
the cost of domestically available material," a Mumbai-based
"The rupee has depreciated by about 4-5% so offers for HRC will
also have to come down. We are asking for at least a $20-25
[per tonne] reduction in cfr prices," the importer said.
HRC from China will cost importers around Rs43,000 ($803) per
tonne after paying taxes and duties at current rupee/dollar
rates, while domestic prices for similar material are
Rs42,250-42,500 per tonne inclusive of tax, which leaves no
room for profits, the importer said.
The rupee has also become too volatile for importers to take a
call on imports.
A lot will also depend on how Indian mills respond in
May to the current market situation, another importer said.
"If mills here increase HRC prices by Rs1,000-1,500 [$18.66-28]
per tonne, we can certainly reconsider the offers. The local
price of HRC also has to increase," the second importer said.
The domestic HRC market has already shown signs of weakness
over the past couple of weeks, which is another reason why no
coil is being booked, market participants said.
A second participant said that since the rainy season will
start in June, consumption of HRC will fall, further damping
prices of the commodity. All the current offers are for
shipments in June-July.