Indian steel market participants are expecting an uptick in imports of various grades of hot-rolled coils into the country in the coming months after Vietnam’s Formosa Ha Tinh received Bureau of Indian Standards (BIS) approval from the government.
The Indian government approved the BIS certificate to Formosa Ha Tinh’s pipe grade IS 1079:2017 HRC, which will be valid until Dec. 4, 2024.
The mill’s previous BIS license had expired on Dec. 4, 2023 and renewal took nearly five months due to a delay in processing at the BIS, according to market participants.
Sources said the development comes at a time when large quantities of material were booked for imports from China and at prices lower than the prevailing prices in the domestic market.
A Mumbai-based trader said that approval for other grades of HRC material was also expected in the next few days.
Sources said that the likely rise in imports would put pressure on prices, especially during the July-September quarter when Indian demand typically declines due to the monsoon season.
"There are offers from Vietnam at $610/mt for July shipment, but no one is interested yet," a west India based trader said, adding that it still seems unlikely that Chinese mills’ BIS licenses will be renewed.
BIS renewals and new applications for Chinese and Vietnamese mills have been pending with the Indian government since last year.
"I think BIS is reopening. I am not sure if everyone can get the renewal, but at least something is proceeded," a Vietnamese trader said.
India's steel imports have surged over the last two years as demand and prices in the country were relatively strong compared to the global market, prompting countries like China, Vietnam, South Korea and Japan to sell to India.
India swung to become a net importer of finished steel for the financial year ended March 31, 2024, as imports of finished steel rose 38.1% to 8.32 million mt, while exports were up 11.5% at 7.49 million mt, according to official Joint Plant Committee data.
Flat steel products accounted for 95% of the overall FY 2023-24 imports by India, or 7.88 million mt, which was up 41% against FY 2022-23, JPC data showed.
Of the flat steel imports, hot-rolled coil/strip imports surged 72.2% year on year to about 3.63 million mt, making hot-rolled coil/strip the most imported steel product in FY 2023-24.
A second Mumbai-based trader said that the Vietnamese producer also has an additional advantage to export to India as the trade would be protected under an already existing free trade agreement between the two countries.
Platts, part of S&P Global Commodity Insights, assessed HRC in the Indian domestic market at Rupees 54,250/mt for 2.5-10 mm thickness on an ex-works Mumbai basis May 16, steady from the previous session.
