Indian mills may raise flat steel prices further in Nov, market acceptance skeptical

With key Indian players announcing 2nd hike in prices in Oct, domestic HRC prices in India have increased by INR 250/t w-o-w in the trade market. SteelMint’s benchmark assessment for commercial-grade HRC stands at INR 42,500-43,500/t exy Mumbai. Meanwhile in other trade markets, prices have increased up to INR 750-1000/t w-o-w basis.

Mills raised price for the second time in Oct ’20– SAIL announced a 2nd price hike in the month by INR 500-1000/t last week. Hike of INR 1,500-2,000/t was announced towards the beginning of the month. Meanwhile, JSW raised CRC price by INR 500/t from 26th Oct’20. This was the second price hike announced by the company in Oct.

All the major steel manufacturers are planning for a further hike in Nov by around INR 1,000-1,500/t both in HRC and CRC. In addition to tight supply and robust downstream demand, hike in iron ore prices has also led to hike in steel prices.

Aditya Birla Group-owned – Essel Mining has increased iron ore fines price by INR 300/t, trade sources have reported SteelMint. Amid tight material availability in Odisha’s merchant market, iron ore & pellet offers have continued to increase.

However, major stockiest in northern India mentioned that although mills are pushing for increase but it’s not viable.

On similar lines, few trade sources in Mumbai shared that, “Restocking demand from stockist seems to have completed, but end use segment especially from construction sector has not yet picked up “

SteelMint price assessments of key trade markets

• HRC (IS 2062, 2.5 – 8mm) prices are assessed at INR 44,500-45,000 (exy-Delhi) while INR 43,500-44,500/t (exy-Chennai).
• CRC (0.9 mm IS513 GR) are currently seen at INR 53,000-54,000/t (exy-Delhi) and INR 53,500-54,500/t (exy-Chennai).
• Prices do not include GST @18%.

The acceptance of the Nov month price hike seems uncertain. Also, limited restocking need from stockiest may keep prices under pressure. But with auto sales and white goods demand recovering, it would be interesting to see if market is able to absorb the next round of price hike.