23 November 2022 – Was the Indian export tax on steel just a diversionary tactic? Nickel prices rose by more than 4% on Tuesday. Stainless steel spot prices rise in China. Italian rolling mills and service centres start buying spree. And scrap demand and price are currently developing positively.
Nickel prices up, Chinese stainless steel prices rise
Yesterday, nickel on the LME again dared to jump above the $ 26,000 mark and closed with a plus of 4.16%. And China continues to report rising prices for stainless steel on the spot markets.
Italian HRC market continues to pick up
After the Italian service centres and rolling mills have significantly reduced their stocks according to market information, demand for HRC is picking up strongly. In particular, service centre customers are increasingly requesting volumes for the first quarter of 2023 and an increase in orders is reportedly being seen. Rising prices and larger volumes indicate positive sentiment.
Demand for scrap continues to rise
The demand for scrap especially from Turkey, has continued to increase and has had a positive impact on the price, as reported e.g. from Belgium. Combined with rising HRC demand in Europe, prices could get further support. LME steel scrap prices are now back above the levels seen in early October and well above the levels seen in early November.
Was the Indian steel export tax just an appeasement strategy?
The end of the Indian export tax on steel came as a surprise even to many Indian market participants. The domestic government had previously signalled that a reduction would not be considered until 2023 at the earliest. And even now analysts are reacting with caution and warn against too much euphoria.
Did measures have to be taken by the government?
According to some experts, the introduction of the export tax in 2022 could also have been an appeasement strategy vis-à-vis communities of states such as the European Union and the United States. In view of the EU Safeguard Quotas for certain Indian products, which have been constantly overrun in the past, the Indian government may have tried to avert further punitive measures by the market watchdogs. Possibly also with regard to the envisaged free trade agreement with the EU.
Taiwan with strict export quotas
The Taiwanese government is already pursuing a restrictive course for precisely this reason and has in the past repeatedly influenced the export quantities of steel and stainless steel sold to Europe. Whether India can succeed in such a manoeuvre remains to be seen.
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