Indian spot steel prices continued to rise, consecutively for the fifth day, yesterday. SteelMint’s daily scrap and billet index closed at INR 40,700/t DAP Mandi and INR 43,600/t exw Raipur higher by INR 700/t and INR 200/t respectively.
These rising prices have dampened the trade volumes as they resulted in cautious buying in the market. SteelMint billet index (which is a average weighted volume based index) reported trade volumes of just close to 1,000 t, which in a normal day would be at 5,000 to 6,000 t levels. Similar trends were seen in other commodities as well.
Participants highlighted that rising prices meant that companies needed a higher working capital, which in turn impacted their capacity utilisation.
On the other hand, large steel mills are still negotiating with auto companies for a long term price contract, which expired on 31 Mar ’21. Both the parties have reached a stalemate and are unable to finalise the price and frequency of the contract. In the meanwhile, Mills are contemplating opting for a quarterly contract instead of half yearly, and have proposed a price hike of over INR 10,000/t for the on going quarter.
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