Indian producers of coated flat steel products have increased their list prices by up to INR 1,500/t ($18) for early January sales earlier this week. Domestic trade-level prices have also increased as market activities have improved over the past couple of weeks and price hikes announced by mills.
Subsequent to the revision, list prices for early-January sales are as below:
- JSW Steel:
GP (0.8mm, 80gsm): INR 66,550/t ($809)
PPGI (0.5mm, 90gsm): INR 76,500/t ($929) - AM/NS India:
GP (0.8mm, 80gsm): INR 65,000/t ($790)
PPGI (0.5mm, 90gsm): INR 75,000/t ($911) - Prices mentioned are on an exy-Mumbai basis, excluding GST at 18%.
SteelMint’s weekly assessment of galvanised plain (GP) coils (0.8mm, 120gsm) stood at INR 67,000-68,000/t ($814-826), while pre-painted galvanised iron (PPGI) (0.5mm, 90gsm) prices were at INR 75,000-76,000/t ($911-923) on 6 January. Prices are on an exy-Mumbai basis, excluding GST at 18%. (INR 1 = USD 0.0121489 ; USD 1 = INR 82.3117)
Why mills raised prices?
1. Raw material prices rise: Prices of raw materials have been rising since mid-December. For instance, SteelMint’s Odisha iron ore fines (0-10mm, Fe 63%) index has increased from INR 3,700/t ($45) ex-mines on 12 November to INR 4,750/t ($58) ex-mines on 31 December. Similarly, weekly average prices of Australian premium hard coking coal (HCC) have increased by around $39/t (INR 3,210) to $302/t (INR 24,858) CNF Paradip, India for the week ended 31 December as against $263/t (INR 21,648) CNF in the first week of December. Prices were assessed at $318/t (INR 26,175) CNF on 6 January.
Furthermore, prices of feed materials such as hot rolled (HR) and cold rolled (CR) coils have also risen over the last three weeks.
2. Improved global sentiments: The removal of 15% export duty on clad or plated flat steel products has resulted in improved exports from India. European buyers have booked volumes from Indian producers. For instance, 50,000-60,000 t of coated steel was booked for exports for end-December and January deliveries. Moreover, European buyers are inclined towards replenishing their depleted stock levels in the first quarter of 2023, which is likely to open up further opportunity for exports and keep sentiments buoyed.
3. Better performance of end-user industries: The construction and infrastructure, automobile and power generation and distribution segments are the major consumers of coated steel. In the construction segment, pre-engineered buildings came out with requirements in mid-December. Another key consumer is the green energy segment which has been expanding, especially solar and wind power. The installed capacity of solar power stood at 61,966 MW in November 2022 with capacity addition of 324.09 MW m-o-m, as per data from the Central Electricity Authority under the Ministry of Power. Solar power capacity was 12,619.65 MW higher than 49,346.71 MW in December 2021. Similarly, there has been an addition of 1,812 MW wind power capacity to 41,895.28 MW compared with 40,082.7 MW in December 2021.
Near-term outlook
It is likely that trade-level prices of coated steel shall stay supported in the near term as the major consuming sectors witness an acceleration in activities.
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