India: HRC trade prices range-bound; market activities slow down

The domestic HRC trade market prices have remained range-bound for the past two consecutive weeks as the activities remain slow in the market. Buyers continue to stick to need-based procurement since Nov’21 on elevated prices.

What factors are impacting the momentum of the market?

1. Robust exports impact domestic supplies: Indian steel majors have exported in good volumes in the past few months. Indian HRC exports for Jan’22 stood at around 462,336 t as per vessel line up data maintained with SteelMint. Export deals were concluded majorly to the Middle East, Europe and Gulf countries. Also, mills have concluded deals in these regions for February and March shipments. Moreover, mills are now facing hurdles in supplying to the domestic market, which has kept prices in the key regions range-bound for the past couple of weeks.

2. Rising global HRC prices, mills ready for 2nd price hike annoucements: On the international trade platform, HRC prices have been moving up since Jan’22. For instance, the Chinese HRC (SS400) export offers had broken the downtrend in the beginning of the year, stablilsing at $765/t FOB. Since then, prices have gradually risen to $830/t FOB as of the current week. Futhermore, SteelMint’s India HRC export index has been on a continual uptrend from $720/t FOB in mid-Jan’22 to the current week’s assessment of $867/t FOB. This elevation in global HRC prices is encouraging mills to consider for the second round of price hikes this month.

3. Raw material prices continue to remain high: The present price levels of raw materials are much higher as compared to those a year back, thus, elevating the cost of production for steel manufacturers. For instance, iron ore fines (0-10mm, Fe 63%) was assessed at INR 6,300/t ($) ex-mines in the previous week, up by a significant INR 850/t against the year ago period. Similarly, the weekly average price of imported coking coal (Premium HCC, Australian origin) was assessed at $416.17/t CNF Paradip, up by a whopping $268/t against CPLY.

Moreover, raw material prices have also been high against INR 5,250/t ex-mines for iron ore fines and $331.28/t for imported coking coal seen in the second week of Jan’22.