India: Domestic HRC prices touches one year high

Indian HRC prices recorded an almost one year high in Aug ’20 amid tight domestic supplies.

Currently, HRC prices are at INR 40,250-41,250/t (ex-Mumbai), a level not seen since Jun ’19.

Mills have announced three consecutive price hikes this month on limited supply and restocking demand in the domestic market.

Further, on a weekly basis, domestic traded HRC prices increased by INR 800-1000/t.

SteelMint’s assessments of HRC and CRC prices-

• HRC (IS 2062, 2.5 – 8mm) prices were at INR 40,250-41,250/t (ex-Mumbai), INR 40,500-41,000/t (ex-Delhi) while INR 40,000-41,000/t (ex-Chennai).
• CRC (0.9 mm IS513 GR) prices were assessed at INR 45,500-46,000/t (ex-Mumbai), INR 45,000-46,000/t (ex-Delhi) and INR 45,500-46,500/t (ex-Chennai).
• The prices mentioned above do not include 18% GST.

Reasons driving domestic HRC trade prices

1. Major steel mills announced three consecutive hikes in Aug ’20- At the beginning of Aug ’20, Indian steel mills lifted prices by around INR 2000/t with the second hike of INR 500-1000/t mid-month followed by a third hike on 18th Aug ’20 of INR 1000/t. Mills are planning to increase prices further by INR 750-1000/t for Sep deliveries.
2. Higher exports resulted in tight supply in domestic market- Domestic HRC supply is tight due to higher export shipments. India shipped 1 mn t HRC in Jul ’20 mostly to China and Vietnam. However, from Sep onwards mills might focus on domestic sales.
3. Increase in raw material prices- A sharp increase in iron ore prices over the past few weeks due to limited supply in Odisha has also supported downstream prices, including HRC.

Few trades are taking place amid higher prices. “Trade volumes have declined and retailers are holding onto their stocks and are reluctant to purchase at higher prices,” said a stockist based in Faridabad. Deliveries are getting delayed due to tight supply.