The end-user industries of tinplate and tin-free steel are bracing for an impending price rise that is likely to put them further on the backfoot.
Domestic producers, a source informed SteelMint, have indicated an additional 20% increase in prices in June-July’21 on the back of a 40% hike effected 4-5 months back. Domestic prices of the materials are ruling at around INR 95,000-1,00,000/tonne (t) after the 40% increase and these are slated to go up by another INR 20,000/tonne in June-July’21.
“The reason for the second round of price hike, we are told, is the increase is prices of hot rolled (HR) and cold rolled (CR) coils. Earlier, the domestic tinplate and tin-free steel prices used to be fixed on a quarterly basis. However, since the last 3-4 months, these are being revised monthly. The monthly price revision is a bother. The quarterly revisions allowed us to commit to our customers at prices accordingly,” said the source.
Import prices up too
Import prices were hiked around five months too. Roughly, these are ruling at $1,300/tonne cnf India plus port duties, up from the earlier $1,000/tonne. “The import prices are also up because of the rising HR and CR prices,” the source said, adding that tin prices have also doubled or have shot up 70-80%. However, tin is a small component of tinplate, the main being HRCs.
Quality control order leading to shortage
It may be recalled that shortage in tinplate and tin-free steel stems from scarce imports of the same on account of a government quality control order (QCO) imposed on 17 July’20. The government had imposed a BIS standard on imports of tinplate/tin-free steel products like easy-open ends. Implementation of the same has now been extended up to 17 July’21.
“Easy open ends are not manufactured in India. We are solely dependent on imports. The BIS order is applicable till July. But there is hardly any time to get material from overseas,” rued the source.
Another factor causing the shortage is that domestic producers are exporting the raw material at the HR and CR stage (since their realisations are quite good at this stage), instead of converting these into tinplates “We have no issues with that, provided we are allowed to import and as per our requirement,” the source said.
“On one hand the, local producers are raising prices, while supply is inadequate. On the other, imports have been virtually stopped because the government is not giving licenses to the applicants. BIS official need to visit the plants, mainly in Korea, and Japan, before certifying them. This can only happen once the pandemic situation improves. But when that will happen we do not know. At present, only secondary, off-the-shelf material is being imported,” said a source.
Domestic demand
The demand for tinplate and tin-free steel in India is 7 lakh tonnes per annum and growing at 7% per annum. Around 2.5 lakh tonnes are met through imports and 4-4.5 lakh tonnes via domestic production.
Two major domestic players are The Tinplate Company of India Limited (TCIL), a subsidiary of Tata Steel, and JSW Steel. As per Sanjay Bhatia, President, Metal Can Manufacturers Association (MCMA), Tatas contribute almost 3 lakh tonnes and JSW Steel 1.5 lakh tonnes to the domestic market while both players also export from total capacities.
Acute shortage of the materials is impacting the manufacture of food and fruit cans and aerosol containers.
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