Indian HRC prices rise as buyers seek prompt deliveries

Domestic HRC prices increased by INR 500-1,000/t ($7-13) this week, as Indian buyers are accepting higher list prices announced by major producers recently.

Increased downstream demand and tight stocks with traders has increased demand for HRC, supporting prices, with some market participants saying current demand is already at pre-pandemic levels.

HRC demand from downstream sectors like galvanized and color-coated products, and pipes and tubes sectors showed an uptick this week, said market participants.

Indian mills are planning another round of price hike by around INR 1,500-1,750/t for Aug’20 deliveries.

SteelMint’s assessments of HRC and CRC prices-

• HRC (IS 2062, 2.5 – 8mm) prices were at INR 36,500-37,500/t (ex- Mumbai), INR 36,500-37,000/t (ex-Delhi), and INR 38,000-38,500/t (ex-Chennai).
• CRC (0.9 mm IS513 GR) prices were assessed at INR 42,000-43,250/t (ex- Mumbai), INR 42,000-43,000/t (ex- Chennai) and INR 41,500- 42,000/t (ex-Delhi).
• The prices mentioned above do not include 18% GST.

Factors driving domestic HRC prices:
1.Indian steel mills raised flat steel prices twice this month- Last week, state-owned Steel Authority of India Ltd (SAIL) increased HRC prices by INR 500-700/t and JSPL increased prices by INR 750/t .This is the 2nd price hike announced in July as major Indian steel manufacturers had raised HRC and CRC list prices by INR 500-750/t each at the beginning of July.

2.Higher HRC export offers– Steel mills have raised their HRC export offers this week by $15/t in line with higher global prices. Currently, mills are offering HRC at around $475/t CFR for Aug- end/early-Sep shipments. Last week, these offers were around $460/t. Mills raised prices in the domestic market to bring these in line with export prices.

3.Improved demand – Traders from different regions across India are restocking in advance amid expectations of higher prices towards the month-end.Also, several traders had stocked up on large volumes of defective steel sold by mills earlier.But stocks of these defectives are now thinning and these traders have to stock up on HRC soon, which may fuel further price gains.

4. Shortage of thinner gauge HRC – There is a shortage of thinner-gauge material for prompt delivery since most of the mills are busy with exports of thicker gauge HRC (2.5mm).