News
06/12/24
Tight supply fuels Indian interest in wire rod imports
Mumbai, 6 December (Argus) — Interest in steel wire rod imports is increasing in
India owing to limited domestic availability, delivery snags and high prices set
by primary producers, according to industry sources. Unspecified quantities of
Chinese low-carbon wire rod were booked for $515-520/t cfr Mumbai, excluding
value-added tax, in the past few weeks, sources in both China and India told
Argus . High-carbon wire rod was also heard to have been purchased from China
recently, although this could not be confirmed. The booking follows reduced
supply from state-controlled long products manufacturer Rashtriya Ispat Nigam
(RINL), according to a Mumbai-based long products trading firm. RINL at present
is grappling with financial difficulties and raw material shortages, which has
taken a toll on its production. Many participants have questioned this purchase,
as no Chinese mill has a Bureau of Indian Standards (BIS) certificate required
for exporting wire rod to India. Non-BIS material can be cleared by customs only
if the material is used to manufacture goods that will be exported. The booking
has been made under the advance licence scheme, which allows for such non-BIS
imports, a source said. But there are only a handful of wire manufacturers that
export their product and can use imported wire rods, according to market
participants. At a trade fair in Mumbai last month, wire manufacturers said they
were increasingly seeking alternatives to domestic primary wire rod as high
input costs were squeezing their margins. High-carbon wire rod was priced at
57,000-58,000 rupees/t ($672-684/t) by major domestic producers on a delivered
basis in western India, sources said. Chinese offers stood at $570-580/t cfr
India for high-carbon wire rod a few weeks ago, but have now fallen to $560/t
cfr, a trading source said. Wire manufacturers focused on domestic sales were
turning to secondary wire rod, which was nearly 20pc cheaper than primary
material, according to a participant at the Mumbai trade fair. But trading
companies and consumers pointed to availability as the bigger issue, with only a
few major primary producers dominating the wire rod market. Securing a regular
and timely supply of wire rod from primary mills has become a major challenge,
causing supply chain disruptions for end-users, they said. "The price is one
factor, but availability is also a key issue. Mills are unreliable when it comes
to allocation and delivery of the material," a wire manufacturer said. "This has
always been the case but not to the extent seen recently. Now supply concerns
have become worse because of RINL's issues." RINL's finished steel output fell
by 26pc on the year to 1.6mn t from April-October, according to provisional data
from the steel ministry's joint plant committee. Another wire manufacturer said
it had not imported wire rod for more than a year, but was now open to cheaper
imports to protect its margins. For some finished products, such as automobile
parts, it is essential to use wire rod from primary producers but imported or
secondary material could be used to manufacture some other products, a
manufacturing firm executive said. Long products amount to only a small portion
of India's overall steel imports, which are dominated by hot-rolled coil and
other flat products. From April-October this year, India imported about 49,300t
of wire rod — including alloy, non-alloy and stainless steel products — an
increase of more than 30pc on the year, according to data from the steel
ministry's Joint Plant Committee. This made up less than 1pc of India's overall
finished steel imports during the seven months. By Amruta Khandekar Send
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