India’s steel ministry evaluating demand for minimum import price for HRC steel

Major steelmakers in India are advocating to the government the need for the imposition of a minimum import price (MIP) on hot-rolled coil at $615 per tonne “upon factoring cost escalation due to raw material price,” similar to the earlier imposition in 2016, minutes of a recent meeting of India’s Ministry of Steel (MoS) revealed. For all other products, adding $170/tonne to the earlier MIP policy has been suggested.

Market sources had mixed views on whether the move would help address the current pain points of the industry. However, there was unanimity on the fact that the situation in 2015-16 was worse than today.

Average monthly price in February 2016 stood at Rs 29,170/tonne ($409/tonne), the lowest ever since Platts started assessing Mumbai-delivered HRC prices in January 2009. In contrast, the latest January 2019 average monthly price of the same grade stood at Rs 41,000/tonne ($575/tonne), 40% higher than the February 2016 average. At the same time, the average exchange rate stood at Rs 67 a dollar in February 2016 compared with Rs 71 a dollar in January 2019.

The ministry of steel has been hearing the views of both steel mills and end-consumers in February, and has constituted a four-member committee to submit its findings. Thereafter, the ministry is expected — if legitimate — to propose the same to the Ministry of Commerce & Industry (MoC&I), which is charged with making decisions on these matters.

Platts had earlier reported that India’s steel exports for April-December 2018 amounted to 4.67 million tonnes, a 38.5% drop on year, while imports dipped 3.1% to 5.91 million tonnes, as per provisional data from the Joint Plant Committee.

In reference to imports, those from South Korea amounted to 2.19 million tonnes over that period, up from 2 million tonnes a year ago, while imports from China fell to 1.24 million tonnes from 1.72 million. Japan, too, increased its exports to India over the period, by 9.6% to 1.03 million tonnes, while Indonesia sent 218,000 tonnes, 52.4% higher on year.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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