This week domestic HRC prices in traders market have climbed to all time high post price hike announcement by major Indian steel mills made early this week. Major mills namely JSW Steel, SAIL, Essar Steel, Tata Steel raised domestic HRC prices by 1200-1500/MT (USD 16-20) for the month of October. Last week traders in domestic market have already raised HRC & CRC prices by INR 500-1000/MT in line with anticipated price hike by major Indian mills in beginning of this month.
Current trade reference prices for HRC (IS2062) 2.5 mm-8 mm is around INR 47,500/MT (ex-Mumbai), INR 47,500/MT (ex-Delhi) and INR 47,000-47,500/MT(ex-Chennai).The prices mentioned above are basic prices excluding GST @ 18% on cash payment basis.
Currently trade reference prices for CRC (IS513) 0.9mm is hovering in the range of INR 53,500/MT (ex-Mumbai), INR 53,200 – 54,500/MT (ex-Delhi) and INR 53,000-53,500/MT (ex-Chennai).The prices mentioned above are basic prices excluding GST@18% on cash payment basis.
Indian mills had raised prices on the back of costlier imports amid currency depreciation, higher raw material cost and expected improvement in auto sector demand in upcoming festive season. Indian Rupee has hit record low of 73.77 against USD.
Present trade reference prices are record high as per SteelMint’s assessment made since 2011. And as per conversation with market participants the levels have touched nearly all time high. For instance HRC prices in Delhi touched INR 38,000/MT in Jun’11 (excluding Excise Duty @12.5% which was levied then). Current prices are around INR 47,500/MT (basic prices, GST @ 18% extra).
However traders reported dull inquiries and limited trade volumes after price surge.Trade activity remain sluggish and sales volumes reported to be on lower side.
A trader based in Ludhiana quoted,”Demand in domestic HRC market remain lackluster despite surge in prices in beginning of October.However rebates and discounts may provide some support to the market as buyers are reluctant to purchase at higher prices”.
Other market sources also commented that,” Shortage of supply in CRC also lead to increased prices in domestic market.”
Meanwhile HRC export bookings also remain feeble amid competitive offers from other nations like Turkey and Russia.Last offers of HRC from major Indian mill was heard around USD 568-570/MT CFR Vietnam. However Chinese mills is offering USD 565-575/MT CFR Vietnam. HRC export offers from CIS nations is heard around USD 530-540/MT, FoB Black Sea.
The question arises that amid thin trade volumes and fewer export bookings, will such high prices sustain in domestic market ?
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