Vietnamese steelmaker Formosa Ha Tinh will resume steel shipments to India in August for the first time since its import licence was renewed in May, market sources said.
About 60,000t-70,000t of hot-rolled steel has been booked at $590-595/t cfr India for delivery in August, with a major Indian pipe manufacturer among the buyers, traders told Argus. Relatively cheaper steel from Formosa could weigh on domestic prices, sources added.
The Indian government earlier in May renewed Formosa's licence for certain hot-rolled and cold-rolled products, opening the doors to cheaper steel imports from Vietnam's biggest steelmaker.
One of the approvals was for a type of hot-rolled steel under Indian Standard (IS) 1079, valid until 4 December. The steel grade is used to make pipes and tubes, but not commonly used for construction purposes. Many product manufacturers such as pipe makers and automotive parts suppliers use the IS 1079 steel grade and will have no issue replacing domestic steel with the cheaper Vietnamese material, according to a distributor.
Domestic Indian steel prices have risen in April and May because of thin supplies as major mills underwent maintenance work.
The Argus weekly Indian hot-rolled coil (HRC) assessment for 2.5-4mm material was at 54,000 rupees/t ($648/t) ex-Mumbai — excluding goods and services tax — on 24 May, up by Rs2,000/t from the end of March.
Import pressure on prices also eased after the expiration of Bureau of Indian Standard (BIS) certificates for many overseas sellers, including Formosa, late last year. But supply is set to increase in the second half of the year as more imported material becomes available, according to sources.
About 60,000-100,000t of material, consisting mostly of HRC, has been bought from China's Benxi Steel at $560/t cfr India and is expected to arrive next month. Some market sources have also said some quantities have been purchased from Japan for shipment over the next few months, although this could not be confirmed.
The Indian government may try to issue more BIS certificates this year as there are only a handful of large domestic producers and fair competition must exist, a Mumbai-based stockist said.
