- Mills raise list prices by INR 750-1,000/t ($9-12/t)- the third hike in January
- Raw material and coating material prices increase
- Good export volumes lead to supply constraints in domestic market
Indian manufacturers of coated flat steel products announced the third price hike in January. The latest hike is of about INR 750-1,000/t ($9-12/t), effected earlier this week. Increasing raw material and coating material prices, along with good export volumes, are among the leading factors.
Subsequent to the revision, list prices for early-January sales are as below:
- JSW Steel:
GP (0.8mm, 80gsm): INR 68,800/t ($850/t)
PPGI (0.5mm, 90gsm): INR 78,750/t ($973/t) - AM/NS India:
GP (0.8mm, 80gsm): INR 68,000/t ($840/t)
PPGI (0.5mm, 90gsm): INR 77,500/t ($957/t) - Prices mentioned are on an exy-Mumbai basis, excluding GST at 18%.
Why did mills raise 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 increased from INR 3,700/t ($46/t) ex-mines on 12 November to INR 5,500/t ($68/t) ex-mines on 21 January.
Weekly average prices of Australian-origin premium HCC coking coal stood at $330/t CNF India for the week ended 21 January. This stands higher by $28/t against $302/t CNF India seen in the week ended 31 December 2022.
Meanwhile, on a monthly average basis, zinc (ingot, Zn 99.99%) special high grade ingot prices stood at around INR 287,700/t ($3,530/t) exw-Delhi till the week ended 21 January. This is higher than INR 284,400/t ($3,500/t) exw-Delhi in December 2022 and INR 271,400/t ($3,340/t) exw-Delhi in November 2022, as per SteelMint records.
The trade-level prices of cold rolled coils (CRCs), a major substrate material required for manufacturing value-added coated steels, are also on the rise. The trade prices of CRCs (IS513 Gr O, 0.9mm) stood at INR 63,500/t ($784/t) exy-Mumbai as on 18 January in contrast with INR 59,200/t ($731/t) exy-Mumbai assessed on 28 December 2022.
2. Decent export bookings: Removal of the 15% export duty on clad or plated flat steel products resulted in improved exports from India. European buyers booked 125,000-130,000 t of coated flat steel products for January and February deliveries, informed a reliable source. HDG export offers from India also jumped up by $20/t w-o-w to $870-880/t FOB west coast India.
“There is a demand-supply gap in the domestic market and supplies of coated steel products from mills have become scarce recently,” highlighted a major distributor from the west. This has led to a steeper increase in the trade-level prices of such products, he added.
SteelMint’s weekly assessment of galvanised plain (GP) coils (0.8mm, 120gsm) stood at INR 71,000-72,000/t ($877-889/t), while pre-painted galvanised iron (PPGI) (0.5mm, 90gsm) prices were at INR 78,500-79,500/t ($970-982/t) on 20 January. Prices are on an exy-Mumbai basis, excluding GST at 18%. (INR 1 = USD 0.0123529 ; USD 1 = INR 80.9752)
3. Better performance of end-user industries: Construction and infrastructure, automobile and power generation and distribution segments are the major consumers of coated steel. In the infrastructure segment, there has been an addition of 1,006 kms of national highways in December 2022, as per data released by the Ministry of Road Transport and Highways (MoRTH).
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 63,303 MW in December 2022, up by 1,337 MW from 61,966 MW in November 2022, as per data from the Central Electricity Authority under the Ministry of Power. Solar power capacity was 13,956 MW higher from 49,347 MW in December 2021. Similarly, there has been addition of 1,847 MW of wind power capacity, taking the total to 41,930 MW compared with 40,083 MW in December 2021.
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