Major Indian steel manufacturers have announced price correction in list prices of HRC and CRC for Mar’21 deliveries on dull buying interest and subdued demand in the domestic market.
Effective prices for Mar’21:
a. AM/NS India has corrected HRC prices by around INR 1,600/t and offering at INR 54,000-54,500/t. Meanwhile, CRC prices have come down by INR 2,250/t and stood at INR 64,000-64,500/t.
b. JSW Steel Ltd. has announced a correction in the list price of HRC and CRC for Mar ’21 by INR 1000/t.The current price stand at around INR 53,600-54,000/t for HRC and INR 64,000-64,500/t CRC (exy-Mumbai), excluding GST @ 18%.
c. Govt-owned SAIL is offering a rebate on HRC for the MOU holders of about INR 1,500/t on Feb ’21 price deliveries. Along with this, the participants honouring the MoU quantities for Feb and Mar ’21 deliveries shall receive an additional discount of INR 2,000/t.
Mills corrected the list prices of HRC and CRC due to the following factors:
1. Sluggish demand in the domestic market- Limited buying Inquiries and the absence of healthy sales have resulted in tepid demand in the local market. Traders and distributors are procuring material in limited quantities according to the need. Major stockists and distributors are holding decent inventories and seem reluctant to procure material at higher prices. Thus slow demand started to pull down the domestic prices.
2. Easing of iron ore supplies- Odisha– India’s largest iron ore producing state produced 12.05 mn t in Jan’21, up marginally as against 11.86 mn t in Dec’20, according to the provisional data of the Odisha Govt. maintained by SteelMint.AM/NS India recorded a 26% increase in iron ore production in Jan ’21 at 0.63 mn t since the company has inked a mine development and production agreement (MDPA) for its Ghoraburhani Sagasahi block in Feb’21 and the company’s production is expected to increase further with the commencement of production from this mine having an EC limit of 7.16 mn t. Production from Serajuddin mines increased by 61% m-o-m in Jan’21 to 0.38 mn t.
Trade market prices remain moderate this week- SteelMint’s benchmark prices for 2.5mm thickness HRC stands at INR 53,500-54,500/t (exy-Mumbai) remained moderate against last week. Major stockists and distributors are holding decent inventories and seem reluctant to procure material at higher prices.
Short term outlook:
Major Indian steel players have shifted their interest to exports to offset bearish sales in the domestic market. We may even observe exports volumes, including longs and flats, to hit over 1.1 mn t in Mar ’21.
Most mills are sold out for Mar ’21 and whatever offers are pouring in at present are for Apr’21 shipments. For instance, recently major private steel mills booked a few cargoes of HRC to Vietnam at around $735-740/t CFR basis for Mar end Apr deliveries.
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