Shipment company

Paid in dirham or yuan, the cargo of Russian steel reaches Indian waters

Russian steel is heading to India and if trade sources are to be believed, an Akson Serin ship, carrying around 24,000 tons of hot rolled coils (steel), has already entered Indian waters.

Vessel tracking data accessible by Activity area show that the Panama-registered bulk carrier was moored near Mumbai as of Saturday afternoon. The ship began its voyage from St. Petersburg, Russia on June 25 and reached Egypt on July 11, where it remained in port for over 10 hours. And from there it departed for Mumbai the same day (July 11).

The current shipment, from two Russian steel mills, would have been paid in alternative currencies to the dollar or euro, i.e. dirham or yuan. The orders were most likely placed by some pipe makers “or long product makers”, sources said. Details are still awaited.

Indian players – mostly merchant steel and secondaries – reportedly explored offers from Russian steel mills in late May and June, after factories in the European nation offered “heavy discounts” of around 3,000 to 5 ₹000 per ton compared to Indian prices at the time.

According to sources, Russian factories were frantically trying to sell their excess stock in the wake of European Union sanctions. Around this time they started using the distress selling strategy. Reservations are for 100,000 to 200,000 tonnes from buyers here, according to some Indian steel companies.

Incidentally, when most of the orders were placed 8-10 weeks ago, the benchmark price of HRC in India was around ₹65,000 per ton or so, which made Russian bids much cheaper.

“However, it is very unlikely that there will be a surge of orders from Russia,” said an Indian steel mill owner, pointing out that the depreciation of the rupee, a cumbersome letter of credit process from banks and Domestic steel prices falling to ₹59,000-60,000 per ton range reduced the price advantage of Russian offers.

According to the latest data available from the Union Steel Ministry, the country’s imports increased by 2% for the first three months of the financial year (April-June) to 1,172,000 tonnes – against 1,158,000 tonnes imported at the same time last year.

Published on

July 23, 2022