September price hike of Chinese steel will provide relief for Indian manufacturers: Report

New Delhi [India], October 8 (ANI): The recent increase in Chinese steel prices may give some relief to Indian steel makers. A report by Axis Securities highlights that Chinese hot-rolled coil (HRC) steel prices have gone up in September 2024, giving an edge to Indian steel companies.
"The increase in Chinese HRC prices has turned the import parity premium of the domestic HRC prices vs. Chinese prices from approx. 7-8 per cent in Sep'24 into an import parity discount of approx. 3 per cent at present" said the report.
The report noted that as of September 2024, the domestic HRC (hot-rolled coil) prices were about 7-8 per cent higher than Chinese prices, but this gap has now reversed into a discount of approximately 3 per cent.
HRC, which stands for hot-rolled coil, refers to steel rolled into coils at high temperatures and is commonly used in industries such as construction, automotive, and manufacturing.
The report says that this shift is expected to provide some relief to Indian HRC (Steel) makers to stabilise domestic prices.
The reduction in the price gap is likely to make domestic steelmakers competitive with Chinese imports, offering some relief to Indian steelmakers who have been facing downward pressure on prices for the last few months.
On complaints from the domestic steel companies, last month India initiated an anti-dumping investigation concerning imports of Cold Rolled Non-Oriented Electrical Steel originating in or exported from China.
According to the Directorate General of Foreign Trade, POSCO Maharashtra Steel Pvt. Ltd. and CSCI Steel Corporation India Pvt. Ltd. filed an application before the designated authority on behalf of the domestic industry.
The applicants have alleged that the said commodity is being imported from China at dumped prices which they claimed are causing "material injury to the domestic industry".
The applicants have also alleged that there is a further threat of material injury to the domestic industry due to dumped imports and have requested for imposition of an anti-dumping duty on such imports from China.
However, the overall impact of China's economic stimulus on steel spreads, or the margin between the price of steel and its raw materials, may be limited. This is because the prices of key raw materials for steel production, such as iron ore and coal, have also seen an increase in prices. While higher HRC prices are beneficial, rising raw material costs could offset these gains, keeping profit margins in check. (ANI)