[SMM Stainless Steel Flash] India Secures 1.64 MT Steel Quota Under EU FTA, Avoiding 50% Tariff

India's stainless steel scrap imports declined 6% YoY to 0.67 million tonnes in H1 2026 from 0.71 million tonnes a year earlier, driven by elevated landed costs and a sustained domestic scrap price advantage. Imported 304-grade scrap averaged US$1,410–1,450/t — approximately US$100–130/t above year-ago levels, with a net landed cost of approximately INR 148,000–149,000/t versus domestic 304 scrap at around INR 144,000/t, consistently favouring domestic procurement. By grade, 304 imports held steady at 0.26 mnt (+1% YoY), 430 rose to 0.068 mnt (+14%), and 316 declined to 0.06 mnt (-3%). By origin, the US remained the top supplier at 0.094 mnt (+4% YoY), followed by South Korea at 0.051 mnt (-6%) and Turkey at 0.023 mnt (-16%). Ferro nickel imports collapsed 62% YoY to 0.02 mnt, prompting mills to substitute nickel-bearing stainless scrap as an alternative nickel unit source and reinforcing domestic scrap preference. Looking ahead, JSL's capacity expansion will drive structural import demand through FY27–29, but near-term import recovery hinges on international price corrections and INR movement.

According to European Commission data, several EU steel import quotas have been exhausted or are nearing their limits as the July 1–September 30 quota period draws to a close. In stainless steel, Category 9 (cold-rolled sheets and strips) saw Taiwan's 13,246mt quota at 90.96% utilization, while the "Other countries" quota of 8,442mt reached 99.48%, the highest utilization rate among stainless categories. Multiple other quotas have been fully exhausted, including India's organic coated sheets (54,334mt), Australia's HRC (11,830mt), China's merchant bars and light sections (39,484mt), Turkey's railway material and non-alloy wire, and Ukraine's hollow sections and other seamless pipes. Several "Other countries" and "FTA" category quotas have also been depleted. Imports beyond exhausted quotas face the 50% out-of-quota duty, and significant first-come-first-served competition is expected when new Q4 quotas open on October 1.

[9.14 Morning Meeting Notes] US August PPI beat expectations, with the probability of a September rate hike surpassing 70%. August PPI rose 5.4% YoY (vs. 5.3% expected, 4.7% prior), and core PPI rose 4.6% YoY. After the data release, the market priced in a more than 70% chance of a US Fed rate hike in September and fully priced in the first hike of this cycle by October at the latest. The 10-year US Treasury yield surged 12 bps to 4.967% (a near three-year high), and the US dollar index reclaimed the 99 mark to 99.08. Tonight's August CPI is the final verdict before next week's policy meeting. The most-traded SHFE nickel contract (2610) opened lower and trended down in early trading, closing the morning session at 126,000 yuan/mt, down 1.88%. After the US PPI beat, Fedwatch odds for a September hike exceeded 70%, and the double pressure of a stronger dollar and higher Treasury yields sent LME metals tumbling across the board overnight. Bearish sentiment is expected to remain thick before tonight's US August CPI release. In the short term, the most-traded SHFE nickel contract is expected to trade in the range of 126,000-129,000 yuan/mt.