The imposition of 25% tax by the US administration on steel imports is going to affect some Asian markets directly or indirectly. Among others, India is not going to be affected much in term of exports as the country’s steelmakers had already been facing many trade barriers and duties in the US. However, the Indian and many others Asian markets will be flooded by suppliers, such as China, looking new homes for their surplus materials.
Prices of flat steel in India are still higher but expected to decline soon. Looking at the supply-side, major steelmaker’s bankruptcies are still open for the bidding process. Tata steel offered the highest bid for bankrupted Bhushan Steel, while Essar Steel is also on the joint bid of ArcelorMittal and Japan’s NSSMC. End-use sectors in India are performing better. The Indian white goods sector is expected to grow around 20% this year. Demand for refrigerators and air conditioners are set to remain high as temperature this summer is likely to be higher than the last year.
Imports of slab and coils remained low in South East Asia likely due to high stocks and early shipments. The local slab producers in Southeast Asia are focusing on supplying to their downstream operations which leave rolling mills dependent on imports. The current higher slab offers and unexpected weak demand for finished products are discouraging mills to take any positions.
One of analysts from Asia wrote: “Flat steel prices are exhibiting different trends in major markets in Asia. In India, prices are expected to decline soon on the back of some shipments from China and due to excess domestic supply. Prices in Japan would remain elevated due to the surge in scrap prices.”
Source: Commodity Inside
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