Major Indian Mills Likely to Hike Flat Steel Prices for Jan’18

Major Indian steel manufacturers are planning to raise the domestic flat steel prices by about INR 1000-1500/MT (USD 16-23) in Jan’18 owing to surge in raw material cost along with spurt in global flat steel prices.

Major Indian steel mills have geared up for another increase in flat steel prices in domestic market. Market participants commented that buying activity remained active post hike in flat steel prices in the beginning of Dec’17.

Factors responsible for further rise in domestic flat steel prices are-

1. Major miners in Odisha raised iron ore prices up to INR 400/MT  -Odisha based major merchant miners have increased lump prices by INR 400/MT (USD 6) and fines prices by INR 200/MT (USD 3) last week as iron ore supply in Odisha is likely to be impacted due to Supreme Court order. Previously the iron ore prices reported the surge of INR 400/MT towards end of Nov’17.

2. Rise in imported coking coal prices amid tight supply- Imported offers of coking coal is continuously rising and have reached to USD 259.45/MT, CFR India which is equivalent to USD 246/MT FoB Australia.

Since winter holidays have already started in Australia which is extended upto 8 Jan’18 resulting into tight supply of coking coal cargoes to importing nations.

Meanwhile,maintenance activity at the DBCT port had led to congestion which again delayed the cargo vessels. Thus contributing in upward momentum of coking coal prices in Australia.

3. Spurt in global HRC export offers-Chinese flat steel export offers showed uptrend over strengthening domestic market.Major mills in China are offering HRC at USD 585-590/MT FoB basis.

Following the suit Indian mills have also raised the HRC export offers by USD 10/MT and are heard at USD 575-585/MT FoB India.

Also South Korean mills have raised the HRC export offers by USD 20-25/MT in global market.

Positive outlook in global flat steel market has motivated the Indian mills to raise the prices in order to gain higher profit margins in domestic market also.

However presently trade reference prices (basic) for HRC (IS2062) 2.5 mm-8 mm are assessed in the range of INR 39,600 40,000/MT (ex-Mumbai) and INR 40,000-41,000/MT (ex-Delhi).The prices mentioned above are basic prices excluding GST @ 18%.

As per SteelMint assessment current reference prices (basic) for CRC (IS513) 0.9mm is hovering in the range of INR 43,500-44,000/MT (ex-Mumbai) and INR 44,000-45,000/MT (ex-Delhi).The prices mentioned above are basic prices excluding GST @ 18%.