Indian state-owned, Steel Authority of India Ltd (SAIL) has increased HRC prices by INR 500-700/t ($7-9) on flat steel products effective from today across all regions, SteelMint learned from company officials.
This is the 2nd price hike announced in July as major Indian steel manufacturers had raised offers by INR 500-750/t in HRC & CRC prices towards the beginning of this month.
Hike in price is a result of improved demand in domestic market clubbed with rising export bookings.
Hike in export offers following upside in Chinese futures- Indian steel mills have raised HRC export offers to $460/t CFR basis for Sep shipments. Last offers were in the range of $ 445-450/t CFR basis for July shipments. India reported an all time high export numbers in June to over 2.2 mn t, of which 70% was shipped to China. Most of the mills are booked till August shipments.
Chinese rebar futures increased by over ~RMB 100 against the beginning of this month. Higher Chinese futures results in the uptrend in export offers and surge in domestic prices. Following this, Indian steel mills also raised offers.
Drop in steel inventories as exports pick up– Higher exports eroded SAIL’s product inventory to 1.65 mn t as on 30 Jun’20 compared with 1.7 mn t on 31 Mar’20 and 2 mn t as in May ’20. SAIL produced 16.15 mn t crude steel and 15.08 mn t of saleable steel during FY’20.
The Company exported about 350,000 t steel products in Jun’20 with major buyers being China, Vietnam, Southeast Asia, and Saudi Arabia. Meanwhile, the company is aiming to double exports to 2.4 mn t in FY ’21 from 1.18 mn t in FY’20. The company expects to lift sales by over 5% in FY’21 on the back of higher export volumes and a recovery in domestic demand during the second half of the fiscal year.
High global prices limit import bookings –South Korean and Japanese steel producers are currently not offering cargoes in the Indian market due to low demand and anti-dumping duties. The floor price of anti-dumping duty for Korean cargoes in India is set at $478/t while for Japanese cargoes the floor is at $489/t, making it unviable for Indian buyers. Meanwhile, Indian steel mills are seeking imposition of border adjustment tax on steel imports despite the sharp drop in imports over the past few months. These mills are seeking an additional tax on imports to compensate for lower rates of taxation and tariff in major steel exporting nations.
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