Indian mills lift HRC list prices by INR 2,000/t ($27) on tight supply

Indian steel manufacturers have increased HRC prices by INR 2,000/t ($27) for Sept’20 deliveries. Prices have moved up on the back of supply concerns and hike in global steel prices.

After the latest increase in prices, mills are offering HRC (2.5-8mm, IS 2062) in range of INR 40,750-41,000/t (exy Mumbai) and CRC (IS 513 GR, 0.9 mm) is INR 47,000/t.These prices don’t include GST at 18%. Following price announcement by mills, domestic trade prices at distributors end also reported a hike.

Notably, at the beginning of Aug ’20, Indian steel mills lifted prices by around INR 2,000/t followed by the second hike of INR 500-1000/t and the third hike of INR 1,000/t on limited supply and restocking demand among traders.

SteelMint’s assessments of HRC and CRC prices-

• HRC (IS 2062, 2.5 – 8mm) prices stand at INR 41,000-42,000/t (ex-Mumbai), INR 41,000-42,000/t (ex-Delhi) while INR 41,500-42,250/t (ex-Chennai).
• CRC (0.9 mm IS513 GR) prices are assessed at INR 46,000-47,000/t (ex-Mumbai), INR 47,500-48,500/t (ex-Delhi) and INR 46,500-47,000/t (ex-Chennai).
• The prices mentioned above do not include 18% GST.

Why are Indian flat steel prices moving up sharply?

1. Mills defer export shipments- Indian steel mills are facing supply shortage owing to increased volumes of HRC exports made in the last few months. As per data maintained with SteelMint, Indian HRC export volumes recorded 1 mn t in Jul’20 majorly to China and Vietnam. Thus mills have few backlog orders for exports of Aug shipments which they have deferred their shipments to cater domestic demand. Meanwhile improved buying activities in the domestic market lead to a supply-demand mismatch.

Meanwhile few major mills are using HRC for downstream industries like galvanized and color coated due to which they have limited availability of material to sell in domestic markets which in turn resulted in price hike

2. Few mills undergoing maintenance shutdown– Tata Steel BSL to undergo a week-long maintenance shutdown in one of its blast furnace at Angul plant. This will result in the HRC production loss of around 50,000-60,000 t shared by trade sources to SteelMint.Also, there is the market rumor that AMNS (ArcelorMittal Nippon Steel India) is facing some production issues which may result in a shortfall of 50,000 t HRC. However, company officials didn’t confirm the same till the time of publishing this report.

3. INR appreciation against $- Yesterday, INR appreciated to 72.7 against $, versus over 75 in mid-Aug’20. This may lower mill’s interest in exports for the coming month.

4. Iron ore prices remain on higher side- Domestic iron ore prices are expected to remain supported. NMDC had last month rasied price twice and also prices in Odisha have rallied in past 2-months as most of auctioned blocks are yet to resume production.