Market participants shared with SteelMint that Indian steelmakers may further raise domestic HRC & CRC offers by around INR 1000/MT for March bookings.
In the beginning of Feb’19 Indian steel mills increased HRC & CRC prices by INR 750-1000/MT followed by second hike taken in mid of Feb by INR 500-1000/MT.Thus the total increase made by Indian mills was around INR 1,200-1,750/MT for Feb deliveries.
Why Indian steel mills are planning for further increase in offers?
1.Surge in raw material prices- Towards the end of last week India’s biggest iron ore producer NMDC increased prices by upto 17% from Chhattisgarh mines .And Odisha based merchant miners have raised iron ore prices twice in the month of Feb following surge in pellet and sponge prices.
Meanwhile coking coal offers also showed uptrend due to disruptions in vessel movement in Australia. Currently coking coal offers inch up against last week and heard at USD 212.25/MT FoB Australia, up by USD 10-12/MT M-o-M.
2.Limited HRC import bookings – Trade sources shared that in mid of Feb Indian mills booked around 25,000 MT of HRC from Japan at around USD 540/MT CFR basis. Meanwhile offers from South Korean mills were also reported last week at USD 560-565/MT CFR basis for March/Apr shipments, but booking could not be confirmed at the time of publishing this report
Thus limited bookings also compelled Indian manufacturers to further raise HRC offers in domestic market
3.Indications on MIP created positive sentiments- Indian steel mills are pursuing with government to re-impose Minimum Import Price (MIP) on steel imports over rising imports. As per reports, major Indian mills have put up a request to the government to implement higher duties to curb steel imports to India.The final decision is still awaited.
4.Active buying in domestic market- Few traders commented that end users are restocking the material in anticipation of increase in prices in near term.Increased prices are accepted in domestic market over improved buying.
Meanwhile current trade reference prices in traders market for HRC (IS2062) 2.5 mm-8 mm is around INR 42,000-42,500/MT (ex-Mumbai) and INR 42,500-43,000/MT (ex-Delhi).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 46,000-47,000/MT (ex-Mumbai) and INR 48,000-49,000/MT (ex-Delhi) The prices mentioned above are basic prices excluding GST@18% on cash payment basis.
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