Friday, 01 October,
SteelMint Exclusive
* Indian Rupee appreciation
* Chinese HRC export prices less that Indian domestic HRC prices
* Scrap and Billet prices softening in Europe
* Price increase on pressure of high raw material cost.
* Real demand still not strong
Indian Rupee appreciation is a concern for Indian steel industry as it has made Chinese imports of HRC yet again cheaper compared to Indian domestic HRC prices.
Experts say that Chinese imported HRC is being quoted at about Rs 31000/MT landed in India, where as domestic HRC prices at Rs 32000-34000/ MT.Though import of Chinese HR coil has fallen drastically after Chinese govt had lifted rebate on exports of HRC and India has increased import duty on cheap HR coils from China.
Yet again, Chinese import is cheaper that domestic HR coil prices, experts say that markets are volatile at this moment and remain cautious on recent hike in steel prices.
Scrap and Billet prices in Turkey have seen a sharp fall after a rally, due to poor demand. Present Scrap price is being quoted at $385-390/MT landed India whereas Steel Billet on London Metal Exchange has fallen to $455/MT after it reached a high of $500/MT. International factor doesn’t seem to be encouraging for steel experts.
Iron ore remains a major problem for steel manufacturers across India, after govt has taken strict action to stop illegal mining. Most of the mines in Orsisa and Karnataka remains closed for reasons such as illegal mining and violating forest laws. “14 mines in Orissa remains closed for violating forest laws, about 40,000-50,000 MT of production loss every day. Iron ore availability remains critical for Sponge iron manufacturers based in Orissa, Bengal, Chattisgarh and Maharastra” said a Sponge manufacturer based in Rourkela.
“Recent hike in Iron ore prices by Essel mining and Rungta mines have made iron ore unaffordable for us. After the hike, landed iron ore prices in Raipur will be about Rs 8,400-8,500/MT for 65 grade Fe. Production cost will be around Rs 18,800/MT and present market rate of Sponge iron is Rs 18,500-18,800/MT in Raipur. We are more keen to buy Iron ore from NMDC as prices are lower comparatively to Iron ore from Orissa” said a Sponge iron manufacturer in Raipur.
“Real demand still not encouragingly strong; demand has improved not enough to absorb such increment in steel prices. Demand has not been encouraging till now” said Mr Aman Sandhu, Director Sandhu Tubes based in Jamshedpur.
Experts are of opinion that being cautious at this moment and adopting a wait and watch policy till market forms trend, will be a fair idea.
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