Following the footsteps of JSW, SAIL too increased its prices by 2% across major trading regions in India. However, price hike for other major Flat Steel manufacturers like Tata Steel and JSPL is still awaited. Last month, after JSW announced a price increase of INR 1,000/MT, SAIL too followed suit by increasing its prices by INR 400-INR 1,000/MT across India.
Prices for HRC (2.5 mm) in Ludhiana & Delhi were raised by INR 700-INR 800/MT. HRC (2.5 mm) in Delhi is currently trading at INR 42,700/MT (including ED, VAT extra), whereas prices for Ludhiana remained at par with Delhi at INR 42,700/MT (including ED, VAT extra). Traders are optimistic for a good demand in this region.
“On account of improved market sentiments in the north region, price hike in HRC products is likely to be absorbed. There is a mild recovery in demand, which is going to clear off the inventory. Currently, the inventory levels are quite lower as compared to last month’s inventory”, said a trader in Delhi.
SAIL raised HRC offers by INR 400-600/MT in Ahmedabad. HRC is currently trading at INR 44,000/ MT (including ED, VAT extra); whereas Plate (5-10 mm) prices remained at INR 42,500/ MT (including ED, VAT extra).
“Demand is likely to remain flat this quarter, as no major trading is happening in this region”, claimed a trader based in Ahmedabad.
Price hike was also seen in Hyderabad with HRC (2.5 mm) prices increasing by INR 900-INR 1000/MT. The current trading price for HRC is INR 44,000/MT (including ED, VAT extra). Currently, CRC is trading at INR 47,000/MT (including ED, VAT etc). Contrary to north region; traders based in south region are not seeing any healthy demand uptick.
“Markets may not be able to sustain this price hike, as prices are too high and demand has not improved. We expect the prices to roll back soon.” said a trader in Hyderabad.
A comparison of domestic and international HRC prices are as follows:
The price hike by SAIL comes on the backdrop of a seasonal demand in the north region and a lull demand in the south and west region. This hike in price may dampen sales. Analysts and experts still see no major fundamental reason to justify this price hike, apart from rise in cost of production and cost of transportation. As per our sources, this price hike may get reversed at the end of this month, if sales drop.
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