[SMM Stainless Steel Flash] India's Stainless Steel Scrap Imports Fall 6% YoY in H1 2026 Amid Elevated Landed Costs

India has negotiated country-specific tariff-rate quotas (TRQs) of approximately 1.64 million tonnes of steel products under its free trade agreement with the European Union, providing Indian exporters with predictable market access as the EU tightens its steel import regime. The total allocation comprises 946,616 tonnes under the MFN component and 694,853 tonnes under the FTA component, covering a broad range of products including hot-rolled and cold-rolled sheets, metallic and organic coated steel, tin mill products, quarto plates, stainless steel products, bars, wire rods, and pipes and tubes. The negotiated quotas are significant given that the EU's new Steel Regulation, effective July 1, 2026, imposes a 50% out-of-quota duty on all steel imports, including from FTA partners. The agreement includes a mechanism protecting India from being disadvantaged should the EU extend more favourable quota access to other FTA partners, with quotas subject to review one year after entry into force and every five years thereafter.

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.