India's steel imports drop on fears of higher duties

Most Asian steel mills have withdrawn offers to Indian buyers on concerns that a safeguard duty may be imposed soon.

Overseas mills do not want to be charged on a retrospective basis in case a safeguard duty is announced, said a Mumbai-based export agent.

India's total steel imports during April-June fell by 9pc from a year earlier to 1.72mn t, according to the steel ministry.

The most imported steel product during April-June was hot-rolled coil (HRC) with a 34pc share of total imports. But HRC imports during the quarter dropped by 12pc against the previous year to 463,000t.

South Korea, the largest HRC exporter to India, delivered 284,000t, a 61pc share of total HRC imports, followed by Japan at 34pc with 158,000t delivered during the quarter.

The main Indian integrated mills appealed to the government in April to impose a safeguard duty on steel imports arguing that the US Section 232 duties on steel imports have diverted steel deliveries from the US to India.

But some market participants said they suspect that mills may be spreading rumours of a safeguard duty to keep domestic prices stable with the government not showing any intent so far to impose broad duties on steel imports. The Argus-assessed domestic price for HRC 3mm thickness ex-Mumbai last week was at 38,000 rupees/t ($552/t), a drop of Rs2,750/t. Import bookings from Japan and South Korea during the first week of July were at $530/t cfr Mumbai.

Indian mills are struggling with weak domestic demand and falling domestic prices. They hope to arrest drop in steel prices by restricting imports, said a Delhi-based trader.

An anti-dumping duty (ADD) was recommended by the commerce ministry on imports of zinc and aluminium-coated steel products. A final hearing of all parties in the anti-dumping investigation will be given a chance for final hearing today after which the duty could be implemented. The ADD is likely to give some respite to Indian coated steel manufacturers.